Monday, February 26, 2018

Choosing Successor Trustees for Your Living Trust

Summary: A living trust can be a powerful part of your estate plan. Making sure you select the right people to serve as your successor trustees is a vital part of giving you an optimized estate plan. Whether you name people to act individual or as a group is something you should decide based upon the relative strengths of each person and the ability of the group to work together. 

President Theodore Roosevelt once said that, “Nothing in the world is worth having or worth doing unless it means effort.” This is true of estate planning. Anything worth doing, and an estate plan is definitely worth doing, is worth expending the effort to do right. That will mean taking the time to weigh your options carefully and make several very important decisions.

Once you’ve decided to get a plan, you’ll have to decide what type of plan meets your need. If you have decided to avail yourself to the benefits of avoiding probate, then you will have to make several more decisions about your living trust. One of the most important decisions you’ll need to make about your living trust is who will serve as your successor trustees.

First off, you’ll need to decide how many people you want to serve as your successor trustees. It is generally a good idea to make sure that your trust has more than one successor trustee named in it. With too few successor trustees named, you run the risk that, at the time that you need a successor trustee to step in and begin managing your trust assets, everyone you’ve named will be dead or otherwise unable to serve. It is generally a good idea to make sure that have at least one successor trustee and one alternate successor trustee.

Next, you will have to decide who is best suited to perform this task. Being a successor trustee is not just an honorary designation, it is a real position with real responsibilities. It will be important for you to make sure that you name someone who has the time, the knowledge and/or experiences, and the willingness to carry out the tasks of a trustee faithfully. It is important not to name someone simply because they are a close relative (like a child.)

Another thing you’ll need to consider is whether or not to have multiple people serve as co-trustees. Having multiple co-trustees serving together has both its positive and negative sides. On the positive side, having more than one person reduces the possibility of misconduct. A sole successor trustee has more unfettered access and control, and therefore more ability to commit misconduct. On the other hand, having multiple co-trustees can increase the possibility of disagreement and, potentially, gridlock. If you, for example, name your four children as your co-trustees and a majority of the four cannot agree, then action cannot be taken.

What should you take away from all this? You know the people in your life best. You know whether your children can work together effectively and cooperatively. You know whether you have someone in your life whom you can trust to manage the assets of your trust after you cannot. With your input, an experienced estate planning attorney can help you make sure that you have the lineup of successor trustees you need to make sure than your plan continues to function smoothly even after you cannot manage it yourself. 

This article is published by the Legacy Assurance Plan and is intended for general informational purposes only. Some information may not apply to your situation. It does not, nor is it intended, to constitute legal advice. You should consult with an attorney regarding any specific questions about probate, living probate or other estate planning matters. Legacy Assurance Plan is an estate planning services-company and is not a lawyer or law firm and is not engaged in the practice of law. For more information about this and other estate planning matters visit our website at www.legacyassuranceplan.com. 


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Friday, February 23, 2018

The Fundamental Difference Between Will and Living Trusts and What it Means for You


Summary: There are several similarities between wills and living trusts, but there are also many differences. A lot of these differences arise from the fundamental differences that exists between wills and living trusts. These differences can, depending on your situation, created certain advantages of avoiding probate as opposed to using the probate administration process to distribute your assets. A knowledgeable estate planning attorney can help you decide which method makes the most sense for you.

Many newspapers, especially smaller ones, may host a regular Question-and-Answer column with a local professional. In the online version of one Midwestern newspaper, the professional hosting the Q&A was a local estate planning attorney. Recently, he posted an answer to a questioner who wanted to know why a will must be recorded or filed with the court, but a living trust does not.

The attorney diligently walked his audience through the differences between wills and living trusts. In shirt, what it comes down to is that, fundamentally, wills are creations of the judicial process and living trusts are not. A will has exactly zero legal power to accomplish anything until it is submitted to a probate court and a probate judge declares it to be valid, because the declaration of its validity is a byproduct of the probate administration process. A living trust is, in the eyes of the law, a contract between the trust’s grantor and the trust’s trustee and, just like most contracts, becomes effective the moment it is signed and notarized.

Of course, the requirement that a will be filed or recorded with the court is not the only procedural difference between wills and living trusts. As noted above, a will only has the power to control anything after it has successfully gone the legal process of probate administration. There are “side effects,” so to speak, of the probate process. While laws have been reformed and the probate administration process has been made simpler in many states, estates that do not qualify for administration through a “small estate” or “summary administration” process still have to jump through a series of procedural hoops. There is still accounting to be done, paperwork that must be submitted to the court and hearings that must be attended. Even with the changes that have come to pass in the law in the last several years and decades, probate still has the potential to be expensive, stressful and time-consuming for the loved ones you leave behind, especially whomever you’ve asked to be the administrator of your estate.

Again, because they are creatures of contract law and not of a judicial process, living trusts often do not require similar hurdles and similar expenditures of money, time and stress. The events and actions that will take place upon the event of your death are triggered, not by a judicial ruling and order, but by a provision that was already established within your living trust document when you signed it.

Additionally, regardless of the changes that may been constructed in your state’s probate administration laws, one thing that is unchanged is that, in the clear majority of places, a probate case is, like most court case files, a public record. This means that, in most cases, almost anybody can go to the court clerk’s office, request your file and review every non-sealed document in it. In many probate case files, this would include inventory documents, accounting documents and lists of heirs. Because trusts generally do not have to go this judicial process upon the death of the grantor, there generally is no court file at all and no public record for people to access.

This is, of course, a very broad (and non-comprehensive) overview of wills and living trusts and the distinctions between them. Not everyone will benefit for the potential advantages that living trusts offer. Not everyone will feel the impact of the potential drawbacks of probate administration. But many will. Which group you fit into is something that only you, working together with a licensed attorney can decide. An experienced estate planning lawyer can help you choose the planning path that makes the most sense for you.  

This article is published by the Legacy Assurance Plan and is intended for general informational purposes only. Some information may not apply to your situation. It does not, nor is it intended, to constitute legal advice. You should consult with an attorney regarding any specific questions about probate, living probate or other estate planning matters. Legacy Assurance Plan is an estate planning services-company and is not a lawyer or law firm and is not engaged in the practice of law. For more information about this and other estate planning matters visit our website at www.legacyassuranceplan.com. 


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Monday, February 19, 2018

Business Owners | Plan Today to Help Ensure the Continuity of Your Business Tomorrow


Summary: If you are a small business owner, you may have spent your entire adult life sweating and slaving, brainstorming and stressing about ensuring that your business not only survives, but flourishes. For some, the historical legacy of that business may cover even more than your lifetime, possible spanning multiple generations. With all that effort, ingenuity, care and tradition on the line, why take a chance of letting everything fall into chaos when you pass? By planning ahead through proper estate planning, you can ensure that everything you’ve worked a lifetime building will continue to grow after you’ve gone just as it has during your years.

Successful business people have many traits in common. If you’re a business owner, chances are very high that you’re passionate about what you’ve built, you’re highly self-motivated and you have keen sense of vision. All of these traits should make you very driven to ensure that you get an estate plan and that the estate plan you acquire includes components in it that will protect your business from the drag of uncertainty and instability that could plague your business in the weeks and months after your death if you don’t plan.

With a proper estate plan, you can have confidence that your business (whether it’s a retail/service business or another type of endeavor like farming) will avoid this “doomsday” scenario of chaos after you die. A proper estate plan can help you protect your business in so many ways. In terms of the time period following your death, your plan can ensure that your wishes and preferences will be honored.

Your estate plan can include a succession plan that dictates what should happen to the ownership of your business after you die. There are many businesses where an owner or co-owner might want to dictate what happens to his/her ownership interest after death. Perhaps your business is co-owned by a small group of people. Alternately, perhaps you are a sole owner but you have a key employee you’d like to take over the business after you die. Either way, without proper planning, your ownership interest could pass in ways you don’t want. Your business could, for example, go to your child who, while responsible and loyal, has no familiarity or interest in your business. This could cause disorder, instability and harm to your business.

However, through proper estate planning, you can facilitate your goals and minimize the risk of problems. You can create what’s called a “buy-sell” agreement, which can facilitate the continuation of your business in various ways. Whether you want your ownership to pass to a new owner or to your existing co-owners, a buy-sell agreement can assist with that. Additionally, just like with your personal estate planning, trusts and insurance can help with your business-related estate planning. A life insurance policy placed inside an irrevocable life insurance trust, for example, can be one useful way to addressing liquidity issues that might otherwise exist when it comes time for the people you want to purchase your ownership stake.

Other trusts can also be helpful. If, for example, you want to transfer your interest to your children while at the same time retaining an income for yourself, this can be accomplished with trusts like the grantor retained annuity trust (GRAT) or the grantor retained unitrust (GRUT.) While those names may sound intimidating, they simply represent tools in your estate planning attorney’s toolbox that can make sure that both your individual and business are realized in the most efficient and beneficial way possible, facilitating the succession plan you desire while also maintaining your personal financial stability.   


This article is published by the Legacy Assurance Plan and is intended for general informational purposes only. Some information may not apply to your situation. It does not, nor is it intended, to constitute legal advice. You should consult with an attorney regarding any specific questions about probate, living probate or other estate planning matters. Legacy Assurance Plan is an estate planning services-company and is not a lawyer or law firm and is not engaged in the practice of law. For more information about this and other estate planning matters visit our website at www.legacyassuranceplan.com. 


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8039 Cooper Creek Blvd
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Friday, February 16, 2018

Don’t Leave Your Legacy to Chance… Always Make Sure You Have a Fully Updated Plan

Summary: Your estate plan is your legacy. Your legacy is too important to leave open to uncertainty. That’s why it is so important to make sure that you have a proper and complete estate plan in place and that you review (and update, as needed) your plan regularly. With periodic reviews, you can ensure that your plan, including not only your will and living trust, but also your powers or attorney, living will, pay-on-death accounts and transfer-on-death assets are sufficiently updated to ensure that all of them will work together harmoniously to carry out collectively the goals and desires that you want. 

Here’s an example from Tennessee of the risk of uncertainty. The court case surrounding the estate of a man named Stephen contains a somewhat familiar estate planning lesson, but with a bit of a twist. In August 2001, Stephen enrolled a retirement plan for Nashville-Davidson County metro employees. Within his plan documents, Stephen designated his wife, Mary Beth, as the beneficiary.

Just eight months later, though, Stephen and Mary Beth divorced. As happens with many divorce cases, the spouses worked out something called a “marital settlement agreement,” which is a settlement of issues (such as, for example, property division or alimony) that would otherwise need to be decided by the judge. In this couple’s agreement, which the court approved, Stephen got “all right, title, and interest in ‘all retirement that he may have through his employment.’”

Almost 12 years after the divorce, Stephen died. In the intervening 12+ years between his enrollment in the retirement plan and his death, Stephen never executed a beneficiary form other than the original one that named Mary Beth as his beneficiary. So, when he died, two very distinct entities made claims to the retirement plan seeking to receive the payout: one by Stephen’s estate and one by his ex-wife.

The case went to trial and the trial ruled in favor of Stephen’s estate, concluding that the settlement agreement signed as part of the divorce had the legal effect of revoking the original beneficiary designation, which meant the proceeds belonged to the estate. (Whenever you have an account that allows you to name a beneficiary but you have no valid beneficiaries named, then it generally goes to your probate estate.)    

The case wasn’t over, though. Mary Beth appealed… and she won. The appeals court explained that the only way to revoke a beneficiary designation was to use the process dictated by the plan. Stephen’s plan stated that, to make changes or revocations, the plan participant (in this case, Stephen) was required to send a written request to the plan administrator detailing the changes he wanted to make. In other words, Stephen’s plan had no provision for automatic revocations through court documents like divorce settlement agreements. That meant that the original beneficiary designation was still valid and Mary Beth was the rightful recipient of the plan proceeds.

Stephen may have not wanted Mary Beth to receive those funds. Stephen may have though that the resolution of his divorce case with Mary Beth took care of all that. One of the big “take aways” from this is… don’t assume. Make sure that you have a complete plan in place, including your will, powers of attorney, advance directive, living trust and non-probate transfer accounts. Also make certain that all parts of your plan, including your beneficiary designations, are routinely reviewed and updated as necessary to reflect your current wishes and life circumstances.

This article is published by the Legacy Assurance Plan and is intended for general informational purposes only. Some information may not apply to your situation. It does not, nor is it intended, to constitute legal advice. You should consult with an attorney regarding any specific questions about probate, living probate or other estate planning matters. Legacy Assurance Plan is an estate planning services-company and is not a lawyer or law firm and is not engaged in the practice of law. For more information about this and other estate planning matters visit our website at www.legacyassuranceplan.com. 


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8039 Cooper Creek Blvd
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Monday, February 12, 2018

“I Wouldn’t Be Caught Dead…” | How To Take Control Now to Plan Your Final Arrangements

Summary: In many ways, final arrangements are to help the living. Whether it is a moving funeral or a beautiful grave memorial, these things help the living as they seek to honor and remember the departed. One way you can help your loved ones who will survive you is by taking control of your final arrangements. With clear instructions from you regarding how you want your final arrangement handled, your loved ones can proceed with confidence that the decisions they make as they memorialize you are ones that will honor you by reflecting your values and desires. With this confidence, your loved ones can gain a degree of peace of mind in an otherwise unavoidably stressful time. 

Whether you live in Florida, Georgia, Arizona or any of a number of other places, there’s a chance you’ve seen it as you drove down the road. The billboard depicts an older woman in a straw hat, a multicolored purse and a garish pink or orange dress with large white flowers. The caption atop the billboard somberly warns, “You always said you wouldn’t be caught dead in that dress. You’d better tell them now.”

This humorous billboard is typically used to advertise the services of a funeral home or mortuary. The implication these advertisements seeks to convey is something of a public service announcement. If you have certain desires and opinions regarding your funeral, burial or other final arrangements, it is important to communicate those wishes, while you’re still alive, to the people who will be handling those arrangements after you’re gone. If you have preferences but fail to tell anyone, then you may be placing yourself at risk of being… caught dead in that dress you always said you wouldn’t be caught dead in.

Of course, taking control and planning for your final arrangements can achieve much more than just ensuring that you’re not buried in unattractive clothing. Planning can also ensure that your loved ones know exactly what you truly want, and your family won’t have to guess about what your actual goals were. This can include your choice of cemetery, whether you’ll be buried or cremated and what type of funeral service or remembrance ceremony you’d like to have.

If you don’t communicate your wishes, you’ll probably be adding to your loved ones’ stress at what will already be a stressful time. With some families, there may be a risk that, without preferences clearly stated and communicated, the surviving loved ones might fight regarding how the final arrangements should be completed. Even if you have a harmonious family and arguments are not a problem, your final arrangements may still be stressful if you haven’t communicated your desires, as your loved ones worry and fret regarding whether or not the choices they’re making on your behalf match the ones that you would have made if you were making them yourself.

There are various ways to get your wishes put down into writing. Indiana, for example, has a recognized legal document called a “Funeral Planning Directive.” It is somewhat similar to an Advance Directive (Living Will,) except that it covers the creator’s final arrangements. Most states do not have an official legal document dedicated strictly to final arrangement planning. However, there are ways to incorporate your final arrangement preferences into your estate plan, even if your state doesn’t have a recognized legal document for funeral planning. Including a set of instructions to your loved ones regarding final arrangements that you keep with estate plan, for example, may provide valuable comfort, insight and guidance. 

This article is published by the Legacy Assurance Plan and is intended for general informational purposes only. Some information may not apply to your situation. It does not, nor is it intended, to constitute legal advice. You should consult with an attorney regarding any specific questions about probate, living probate or other estate planning matters. Legacy Assurance Plan is an estate planning services-company and is not a lawyer or law firm and is not engaged in the practice of law. For more information about this and other estate planning matters visit our website at www.legacyassuranceplan.com. 


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8039 Cooper Creek Blvd
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Friday, February 9, 2018

How Court Cases Can Offer Lessons in ‘What Not to Do’ in Estate Planning

Summary: Others’ estate plans, especially those published in legal opinions, can be very instructive. They can, in a lot of circumstances, offer very helpful lessons in what NOT to do when it comes to estate planning. Whether it is a plan that is less than complete, the absence of any plan at all or a plan that has documents that are in conflict with one another, the stories of others’ problems that end up in court can help remind you to make sure that you have a plan that is complete, consistent and optimized to meet your needs.  

When court cases are published in the law books, they help judges in future cases to make decisions that follow the precedents established by those cases that came before. Estate planning court cases serve an even greater benefit. Many estate planning court cases can provide valuable lessons to anyone who has created, or is considering creating, an estate plan. While some cases involve plans that worked well, unfortunately a lot of cases are the result of planning gone wrong. Much like some TV shows teach viewers what NOT to do when it comes to anything from cooking to home design to clothing choices, a lot of estate planning rulings are the “what NOT to do” stories of estate plans that went awry.

Take, for example, the estate of Leeanna, a woman who lived in the Tacoma, Washington area. Leeanna had four children and a husband, Jim, all of whom survived her when she died in 2012. When Leeanna died, there was uncertainty about whether or not she had created a valid estate plan prior to her death. The woman’s daughter, Heather, went to court asking a judge to make a legal determination and pronouncement that Leeanna died intestate (meaning that she had no valid estate plan.)  

Whether or not Leeanna died intestate or not mattered a great deal because of the nature of the assets that Leeanna owned. In addition to the things Leeanna owned in Washington, there was the family home in Cabo San Lucas, Mexico. After Leeanna’s death, Jim sought to sell the Mexican property. Under the Mexican rules of intestate succession and heirship (meaning the system for distributing assets in estates with no valid estate plans controlling them,) property distributes to a deceased person’s children. So, if Leeanna died with no plan (as Heather maintained,) then Heather and her siblings owned the place in Cabo, Jim had no legal right to that property and he could not sell the home.

Jim argued to the court that it didn’t matter whether or not his wife had a will. According to Jim, both he and Leeanna signed a community property agreement. In some states like Washington, there exists the option of signing something called a community property agreement, which can serve as means for avoiding probate. This document can say that all of a person’s assets are community property, which means that all of the property goes directly to the surviving spouse upon the death of the first spouse. Jim’s argument was that he and Leeanna had such an agreement so, upon her death, he owned everything, including the Cabo San Lucas property.

Eventually the case wound through the legal system and all the way to the state Court of Appeals, with Heather receiving an unfavorable ruling. While it is possible that the result was the one that Leeanna would have wanted, the path taken to go that point was something that was less than ideal.

The case of Leeanna’s estate is a reminder of two key things when it comes to estate planning. The first is the vital importance of making sure that all of your documents work toward the same goal. While this woman may have had only the community property agreement, most complete plans involve multiple estate planning documents. If you have a document like a community property agreement (if your state allows them) and you have a will and you have a living trust, for example, is essential that you review these documents periodically to make sure that they are maintained in a way that they will work together harmoniously to achieve your objectives.

The second is the importance of making sure that you have a complete plan tailored for your needs. If you are someone who owns property in multiple states (or multiple countries,) you may very possibly be someone who would obtain a larger-than-normal benefit from avoiding probate. For example, if you have property in multiple states, you might be someone who would derive a very high benefit from an estate plan that includes a living trust. By working with experienced legal counsel, you can get a plan that will help your family reduce delays, stress and expenses after you’re gone.         


This article is published by the Legacy Assurance Plan and is intended for general informational purposes only. Some information may not apply to your situation. It does not, nor is it intended, to constitute legal advice. You should consult with an attorney regarding any specific questions about probate, living probate or other estate planning matters. Legacy Assurance Plan is an estate planning services-company and is not a lawyer or law firm and is not engaged in the practice of law. For more information about this and other estate planning matters visit our website at www.legacyassuranceplan.com. 


This article written and published by:
8039 Cooper Creek Blvd
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844.306.5272 (Phone)
@assuranceplan
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