Do not leave your estate planning to Google!

Oftentimes people will attempt to save money by not consulting with an attorney when executing their will or choose to use a pre-printed form or online program.  Attorneys spend countless hours learning the ins and outs of the legal system and they are there to benefit you.

A sobering example illustrates what happens when you fill out legal documents where you may not have a solid understanding of seemingly minor intricacies. 

A recent client came in, explaining that he was about to inherit a large amount of money, well over the lifetime estate tax exclusions, without any proper planning.  The client’s son had filled out an online do it yourself Will thinking that he would be fine.  Unfortunately, the client’s son did not attach the necessary documents the Will required and so the court was left unable to interpret what the Will intended and THREW IT OUT.  We ultimately will never know exactly what the client’s son wanted to happen with his money, but with proper planning he could have easily avoided paying millions in estate taxes, and his legacy in place.  He might not have even wanted his father to inherit ALL of his estate, but given Florida’s intestacy laws, that is exactly what is going to happen.

Now the client must be reactive instead of proactive, and his options have been limited.

This happens all too often.  Do not use online legal documents, they may sound nice and helpful, but they do not replace the expertise of a licensed attorney!  If you have any questions about the validity of your will and what you want to happen when you pass away, please do not hesitate to call Postillion law at 904-615-6621, or visit us at www.Postillionlaw.comAs always, do not hesitate to ask questions, that is why we are here!

Property Control Trusts

A variety of reasons exist for why someone would need an irrevocable trust.  This is not an exhaustive list as other situations exist, but this should give you a good idea of their flexibility.

• 1.       One of your beneficiaries is a minor.
• 2.       A beneficiary is a young adult who is not mature enough to manage significant sums of money or property.
• 3.       You want to leave money to a child’s education.
• 4.       A beneficiary is disabled and will probably always need help managing property.  These are what lawyers call “special needs trusts.”  These trusts allow you to leave the property to the beneficiary whole maintaining their eligibility for various government benefits.
• 5.       One of your beneficiaries is irresponsible with their finances, and the property must be restricted their whole life.  This is what lawyers call a spendthrift trust.
• 6.       You have several beneficiaries, and you want.
• 7.       You want to authorize someone else to decide who will receive your property after you die.  This is a called a “power of appointment.”

Most property control trusts are extremely complex documents and should not be prepared without the help of an attorney. 

Please feel free to contact Postilion Law Group today if you have any questions.

I have the internet, why would I need an attorney to draft my will?

Oftentimes people will attempt to save money by not consulting with an attorney when executing their will, choosing instead to use a pre-printed form or online program.  Attorneys spend countless hours learning the ins and outs of the legal system, and they are there to benefit you. A recent case provides a stark example of the pitfalls of doing this yourself.  A justice who heard the case called it “a cautionary tale of the potential dangers of . . . drafting a will without legal assistance.”  Aldrich v. Basile (Fla., No. SC11-2147, March 27, 2014)

Ms. Aldrich used an “E-Z Legal Form”, where she listed several possessions and bank accounts that she intended pass to her sister upon her death, unless her sister died before her, then they were to go to her brother.  Perhaps prophesizing the future, her sister did indeed pass before her.  You wouldn’t think this would be a problem right, but in fact that is what she tried to account for.  Wrong!  The problem is that Ms. Adlrich inherited additional money and property from her sister, when her sister passed away.  Ms. Adlrich’s will did not contain what is called a residuary clause in her original will, and she never took the time to properly add a codicil (amendment to a will).

After Ms. Aldrich died, the court through the probate process had to decide who would inherit the property Ms. Aldrich received after she wrote her will.  The brother, predictably argued that he should receive the property, but the nieces maintained that the property should pass through intestacy, which is the state law for those who do not have a will, or a valid disposition of their property at the time of their death.

A lengthy legal battle ensued of which, I am sure was very expensive, and the courts decided that because there was no residuary clause in the will, the property would have to pass through the laws of intestacy, which contradicts the intent of Ms. Aldrich’s will. 

This happens all too often.  Do not use online legal documents, they may sound nice and helpful, but they do not replace the expertise of a licensed attorney!  If you have any questions about the validity of your will and what you want to happen when you pass away, please do not hesitate to call Postillion law at 904-615-6621, or Email Chris@Postillionlaw.com.  As always, do not hesitate to ask questions, that is what we are here for!

Common Questions About Revocable Living Trusts

The words Living Trust, and Revocable Living Trust get thrown around your lawyer’s office frequently.  However, most of my clients do not know the differences between basic types of trusts, and estate planning documents.  Over the next several posts I will go over some common questions clients have for me.

WHAT IS A REVOCABLE TRUST?

A revocable trust is a document created by you to manage your assets during your lifetime and distribute the remaining assets after your death. The person who creates a trust is called the “grantor” or “settlor.” The person responsible for the management of the trust assets is the “trustee.” You can serve as trustee, or you may appoint another person, bank or trust company to serve as your trustee. The trust is “revocable” since you may modify or terminate the trust during your lifetime, as long as you are not incapacitated.

During your lifetime the trustee invests and manages the trust property. Most trust agreements allow the grantor to withdraw money or assets from the trust at any time, and in any amount. If you become incapacitated, the trustee is authorized to continue to manage your trust assets, pay your bills, and make investment decisions. This may avoid the need for a court-appointed guardian of your property. This is one of the advantages of a revocable trust.

Upon your death, the trustee (or your successor if you were the initial trustee) is responsible for paying all claims and taxes, and then distributing the assets to your beneficiaries as described in the trust agreement.

Your assets, such as bank accounts, real estate and investments, must be formally transferred to the trust before your death to get the maximum benefit from the trust. This process is called “funding” the trust and requires changing the ownership of the assets to the trust. Assets that are not properly transferred to the trust may be subject to probate. However, certain assets should not be transferred to a trust because income tax problems may result. You should consult with your attorney, tax advisor and investment advisor to determine if your assets are appropriate for trust ownership. 

CAN I BE THE TRUSTEE OF MY OWN TRUST?

YES.  As long as you remain competent you may continue to handle your financial affairs.  While necessary to have successor trustees in place after your death, during your lifetime there is no reason why you cannot be the trustee of your own Revocable Trust.

CAN I CHANGE THE PROVISIONS OF MY TRUST?

As long as you are alive the terms of a revocable living trust are changeable.  When you pass away the terms of the trust are irrevocable, which means that except in very limited circumstances the terms of the trust control, and cannot be changed.

I HAVE A DURABLE POWER OF ATTORNEY DOESN’T THAT COVER EVERYHTING I NEED?

Financial institutions whether they be banks, or investment managers, are extremely hesitant to grant anyone but you access to your accounts.  Even when the authorized agent presents these materials it can be difficult to get these institutions to follow their directions.  A Revocable Living Trust is a much more powerful legal tool that outlines exactly what can and cannot be done on your behalf.

WHAT BENEFITS DOES A LIVING TRUST PROVIDE WHILE I AM ALIVE?

As the length of life continues to increase, families must have a plan in place for what to do when you experience a disability.  Revocable Living Trusts provide assurance that should a disability or accident occur, your affairs will be managed by whom you want, and how you want it done.  By ensuring that your affairs are taken care of, the possibility of a costly court-appointed guardian is reduced.

WILL I HAVE TO CONSULT AN ATTORNEY EVERY TIME I BUY OR SELL ASSETS?

NO!  The trust is designed to simplify your life, not bring more chaos.  Once the trust has been properly funded, any new assets are owned by you as trustee of your Trust.

DOES MY LIVING TRUST NEED TO BE RECORDED OR REGISTERED ANYWHERE?

NO!  This is one of the primary benefits of a trust.  It is a private document that, unlike a Will, is not a matter of public record.  However, you should note that all real property is public record, as your deed should be filed with the proper authority.  This will occur whether or not your assets are placed in a trust.

IF I MOVE IS MY TRUST STILL VALID?

YES!  A Living Trust is valid throughout the United States regardless of where it was created.

These are just a few of the more common questions that I receive on a weekly basis.  If you or someone you know has any questions about trusts, or estate planning in general do not hesitate to call Postillion Law at 904-615-6621, or Email Chris@Postillionlaw.com.  We love your questions, so let us answer them!