March 19, 2018

A Big Myth Concerning Trusts

If you do too much reading online about the difference between wills and trusts, then you are likely to think of the two as something that you have one or the other. That is a myth.

One of the key concerns for people planning their estates today, is whether they should use a will or a trust. Everyone seems to have an opinion about which one of the two main estate planning vehicles is better for general purposes. The two are often discussed, as if they are oppositional.

If you do some research and decide you want to get a trust, then you might go to an online service, pay a fee and download a form to create a trust. The problem? Getting a trust does not mean you should not get a will. You still need a will, as Lake County News discusses in "The difference between a trust and a will."

It is likely that when you pass away you will have some assets that for one reason or another were never put into your trust. Those assets will need to be distributed by your estate and often under the guidance of the probate court. You need a will so what you want done with those assets can be done.

Often that will is only a “pour-over will” that directs that everything should be transferred to your trust. However, there are other things you might also need to accomplish with a will, such as directing who should be appointed as a proper guardian for your minor children. You also might have some assets you do not want to go through a trust for other reasons, for which a will would be appropriate.

The best way to make sure you have all the documents you need in your estate plan, is to hire an estate planning attorney to draft your plan.

Reference: Lake County News (Feb. 24, 2018) "The difference between a trust and a will."

March 13, 2018May 5, 2022

Revoking a Trust

People commonly wonder if they can revoke a trust that they no longer like and if they can have more than one trust. The answer is not a simple yes or no.

A reader recently asked a NWI Times column “Can an individual establish more than one trust?” It seems that the reader was curious whether he could have more than one trust and if creating a second trust would automatically revoke the first one.

These are common questions because most people are more familiar with the law of wills than of trusts. A person cannot have more than one will and creating a new will is an automatic revocation of any previous wills. Trusts do not work like that.

It is possible for a person to have more than one trust. It is not uncommon when people want to accomplish different things with different trusts. However, the assets put into the trusts cannot be the same and most people have no reason to have more than one trust. What most people seek to accomplish with a trust, can best be done with only one.

Whether and how a trust can be revoked, depends on what type of trust it is. Some trusts are created to be revocable at any time, but an attorney should create the trust.

Other trusts are created to be irrevocable. Sometimes they can be revoked but there are often tax penalties for doing so. It is usually advisable to amend an irrevocable trust where and how state law allows.

If you have questions about a trust you have created, it would be best to consider meeting with an estate planning attorney. Profit Law Firm has estate planning attorneys with meeting locations in Chevy Chase, Greenbelt, and the District of Columbia.

Reference: NWI Times (Feb. 18, 2018) “Can an individual establish more than one trust?”

March 5, 2018

The Failure of James Brown’s Estate Plan

James Brown intended for his estate to give millions to poor children. However, he passed away 11 years ago, and the children have still not received anything.

It is not clear how much the estate of legendary soul singer James Brown is worth. The estate claims it is worth about $5 million. However, some experts estimate that it could be worth as much as $100 million.

It is clear is what Brown intended to do with his wealth. He had a carefully crafted estate plan that was intended to give millions to poor children throughout Georgia and South Carolina.

Brown passed away in 2006 but his estate has not given any of the money to the children. Instead the estate is still bogged down in numerous lawsuits and remains unsettled, as The New York Times reported in "Why Is James Brown's Estate Still Unsettled? Ask the Lawyers."

The main source of the dispute appears to be a family feud with Brown's children and grandchildren on one side and his widow, who is the estate administrator, on the other side. Numerous lawsuits have been filed.

In perhaps the biggest lawsuit, the children and grandchildren allege that the widow has cut inappropriate side deals for the copyrights to Brown's music. These copyrights are where the bulk of the estate's value likely is found. They also allege in another lawsuit that the widow was not even married to Brown, because she was allegedly also married to another man.

It is safe to say that this dispute is unlikely to end soon. The biggest losers here are the children who would otherwise be receiving assistance.

Reference: New York Times (Feb. 4, 2018) "Why Is James Brown's Estate Still Unsettled? Ask the Lawyers."

March 1, 2018October 25, 2023

Trusts May Be The Answer: When Minors are Your Heirs

If you think it is likely your heirs will be minors would when you pass away, it is best to do so differently than you would leave assets for adults.

If you have minor children, grandchildren or other relatives you want to include in your estate plan you should do so, because if you leave assets only to their parents, they might spend everything before the minors can inherit it.

You could also simply write provisions in your will, so the minors receive certain assets or a portion of your estate. However, that does not work in the same way leaving assets in a will to adults does. The probate court will have to hold hearings and determine who the best adult is to be in charge of handling those assets on behalf of the minors, until they come of age.

This can be inefficient and, unless you have left special instructions in the will, the person appointed by the court might not be the same person you would have appointed. There is a better way to leave assets to minors as the Times Herald-Record discussed in “Proper legal planning for minor beneficiaries.”

The better option is to create a trust and to fund the trust with the assets you would like to leave for the minors. You can appoint a trustee of your own choosing to administer the assets for the benefit of the minors. You also can leave instructions about how and when the assets are to be distributed for the children. That does not have to be the moment they reach the age of majority.

If you would like to leave part of your estate to minors, then talk to an estate planning attorney about creating a trust to do so.

Reference: Times Herald-Record (Feb. 1, 2018) “Proper legal planning for minor beneficiaries.”

February 19, 2018

Planning for Your Horses

If you have horses, then you can plan for them in your estate just like you would plan for any other property. However, since horses are not exactly like other types of property, you might want to consider treating them differently.

People who own horses tend to think of those horses as some of the most important things in their lives. The horses often represent valuable investments and require large sums to maintain.

For many people, the horses are also considered part of the family and just as important as any other pet. Sometimes they are considered just as important as human relatives. However, under the law, horses and other pets are personal property.

Horses are no different legally than a car. You cannot leave an inheritance to your horses, so they can simply take care of themselves after you pass away. Traditionally, estate law did not allow for anything other than leaving the horses to an heir as property.

Another option exists today as Newsmax discusses in "Equestrian Legacy Planning Through Trusts."

You can now set up a trust for the benefit of your horses. You can put assets into the trust and leave directions for how those assets are to be used to take care of your horses.

A trustee can then be appointed to make sure your wishes are carried out, when you are no longer around to care for your horses. This will ensure that there is a legally enforceable way for you to make sure that the horses are cared for as you want.

If you would like to get a trust for your horses or any other pet, visit an estate planning attorney.

Reference: Newsmax (Jan. 17, 2018) "Equestrian Legacy Planning Through Trusts."

February 6, 2018

Going to North Korea

The State Department suggests that you get an estate plan, should you decide to visit North Korea.

Despite the extremely tense relations between the U.S. and North Korea, it is possible for Americans to visit North Korea. There are probably very few U.S. citizens who want to go anywhere near North Korea. Those that do, are probably journalists and researchers.

The State Department recently offered some advice for Americans who are planning a trip to North Korea.

So, what is that advice?

The agency advises people to first get a will, make funeral plans and get a power attorney, as Fox News reports in "Visiting North Korea? Draft a will and make funeral plans, State Department says."

Traveling to countries other than North Korea is likely not nearly as dangerous. However, this is good advice before traveling to any foreign nation.

Before leaving on an overseas trip, it is a good idea to have an estate plan in place.

Having powers of attorney drafted is an especially good idea, in case anything does happen, so someone back home can handle all of your affairs.

It is unlikely anything will happen to you on your next vacation, but it is always good to be prepared.

Before you visit a foreign country, visit with an estate planning attorney so you can be prepared.

Reference: Fox News (Jan. 15, 2018) "Visiting North Korea? Draft a will and make funeral plans, State Department says."

December 28, 2017October 25, 2023

Incapacity Planning

It is important that you make plans for what will happen to your family and your possessions after you pass away. It is also important to plan for what will happen to them, if you are incapacitated.

You might be aware that you need a will or a trust, so you can make sure your family is taken care of after you pass away. Getting a will or trust also lets you determine what happens to your property after you pass away.

If you have not done so, you really should see an estate planning attorney to get a will or trust as soon as possible, just in case.

While you are at the attorney’s office, you should also get plans for what might happen if you become incapacitated, as the Times Herald-Record discusses in “Make plans in case you are incapacitated.”

The issue is that if you are incapacitated, someone else needs the legal authority to act on your behalf.

Someone will need to be able to handle your bills and to make medical decisions for you, should it be necessary.

If you do not plan ahead, it can be a difficult process for someone else to get the legal authority.

Someone will have to hire an attorney and go to court to get a judge’s permission to act as your guardian.

Fortunately, planning for what will happen if you become incapacitated is not difficult.

You just need a general durable power of attorney and a health care power of attorney.

The estate planning attorney can prepare both of them for you.

Reference: Times Herald-Record (Dec. 12, 2017) “Make plans in case you are incapacitated.”

December 13, 2017

Duke’s Will to Be Unsealed

The Duke of Windsor's will has been sealed since his death in 1972. The will of the man once known as King Edward VIII has been ordered unsealed, so copyrights can be determined for a television show.

It is considered one of the biggest acts of romantic love in modern history. King Edward VIII of England abdicated the throne in 1936, so he could marry a divorced American woman named Wallis Simpson.

His title changed from the king to the Duke of Windsor. He passed away in 1972.

The contents of his will were quickly sealed by the court and have never been made public, despite great public and historical interest in them. People are curious whether the will might shed any light on the man's decision to abdicate.

A court in the U.K. has now ruled that the will is to be unsealed as the Daily Mail reports in "Duke of Windsor's will to be unsealed at last… but only so The Crown's writers can get their facts straight."

The Duke's will is only to be unsealed for a limited purpose.

The writers of the Netflix show The Crown would like to use the duke's letters in their show. However, they first need to know who owns the copyrights to those letters, so they can get the necessary permissions to use them.

It is not likely the will's other details will be made public.

For a former king's will to be sealed, is probably a simple matter.

For other people, it is much more difficult since wills are generally a matter of public knowledge.

People who would like to keep their estates private, should see an estate planning attorney for more information about how to do that.

Reference: Daily Mail (Nov. 15, 2017) "Duke of Windsor's will to be unsealed at last… but only so The Crown's writers can get their facts straight."

September 1, 2017October 25, 2023

Trusts Are Cheaper Than Wills

If you are looking to save money on your estate plan, then you might think that you should get a will since they are cheaper to get than a trust. However, trusts are actually cheaper overall.

Estate planning can be expensive for some people. Estate planning attorneys do not always come cheap and not everyone thinks they can afford to hire one.

In most cases, a will is less expensive to get than a trust. This is because trusts normally require more of the attorney’s time to draft. This leads many people to get wills to save time and money.

The problem with is that a will is more expensive overall than a trust, as the Times Herald-Record explained in “Trusts will cost you less at settlement time.”

When someone passes away, someone must then administer either the will or the trust to make sure that property is distributed as the deceased directed.

Using a will requires going to probate court and having an executor, who can charge for the service, go through the process of administering the estate.

On the other hand, using a trust means that a trustee, who can also charge for the service, is required to distribute everything.

The trustee normally does not have to go to court, which makes it a much faster process. The speed means that the trustee may charge much less overall.

In the end, the trustee may be a lot cheaper than any money that might have been saved by getting a will instead of a trust.

When getting an estate plan created, it is important to use the instruments that work best for your situation. Do not be afraid to get a trust because of the initial expense.

It just may be cheaper in the long run.

Reference: Times Herald-Record (August 2, 2017) “Trusts will cost you less at settlement time.”

July 21, 2017

Do You Need a Trust?

One of the biggest questions in estate planning today, is whether a trust is the best option for your family.

If you were to conduct a representative poll of middle class Americans about the best way to plan for your estate, it is almost certain that the majority of respondents would suggest getting a living trust.

It is the first piece of advice you will find almost anywhere you look for estate planning information. The reason for that is complex.

One reason is that many internet companies who sell trust creation documents have been very active in pushing the benefits of trusts to get more customers. Trusts are also often the best estate planning option for people.

Nevertheless, the key is to determine what the best estate planning option is for you personally, not for society generally, as Madison.com points out in "Is a Living Trust Right for You and Your Family?."

Trusts do have many benefits over wills.

Trusts do not have to go through probate and, therefore, are not subject to the commonly cited costs and delays associated with probate.

Trust provisions do not have to be made public, as most wills do. Trusts are also a great way to control what your heirs might do with their inheritances, but “testamentary trusts” under wills do so as well.

If you really want to know whether you should get a trust, the best thing to do is to ask an estate planning attorney. Tell the attorney what your needs are and let the attorney suggest the best ways to meet those needs.

Reference: Madison.com (June 27, 2017) "Is a Living Trust Right for You and Your Family?."

Building Legacies that Last Estate Planning and Elder Law

Category: Trusts