Trusts

Should You Put Your Home in a Trust?

Simpleshowing’s article discusses the pros and cons of putting your home in a revocable living trust.

“Once you become a homeowner, estate planning needs to include what will happen to your house after you pass away.  If you don’t put those intentions in writing, your intended recipient may have to spend a lot of time and money in order for that to happen, or they could even end up losing it altogether.  This is why you may want to put your home in a trust.”

By |2021-11-02T10:42:50-07:00November 2nd, 2021|

When a will won’t work

Yahoo Finance discusses what a will cannot do:

A will can’t avoid probate, the legal process that typically follows death. In probate, your will becomes a public record and the court supervises the distribution of your estate.

A common way to bypass probate is to create a revocable living trust and then transfer ownership of your real estate, accounts and other property into the trust. You retain control, but upon your death, the person you name as your successor trustee can distribute your property without a court’s involvement, says Matt Palmer, associate product counsel at online legal site LegalZoom.

By |2021-11-05T13:20:30-07:00November 1st, 2021|

Do You Need a Trust?

Charles Schwab asked three of their own professionals important questions regarding the differences between wills and trusts.

A trust is a fiduciary arrangement that specifies how your assets are to be distributed, usually without the involvement of a probate court. They can be structured to take effect before death, after death, or in case of incapacitation. In contrast, wills take effect only upon death and typically need to be authenticated by a probate court, which can take time and involve additional costs.

Trusts can be arranged to accomplish a variety of different goals. For example, you can use a trust to transfer property, help minimize estate taxes, preserve assets for minors until they are adults, or benefit a charity.

By |2021-11-05T15:21:20-07:00October 6th, 2021|

How to Give Assets to Loved Ones in an Asset Protected Trust

Most of our estate planning clients create a trust because they want to leave assets to children and loved ones in a trust that protects the assets from the child’s or loved one’s creditors and ex-spouses.  When we are hired to prepare an estate plan with a trust we prepare a revocable living trust that contains language that causes the successor trustee to create a beneficiary controlled asset protected trust (a BCAPT) for each child or loved one on the death of the trust maker or death of the second spouse if the trust is a joint trust.   See the contents and prices of our two estate plan packages.

If the future beneficiary of the BCAPT ever got sued the creditor could not touch the assets in the trust.  If the future beneficiary were to marry and get divorced the ex-spouse could not get any of the assets in the trust.  You cannot predict if your child or loved one will ever have a creditor or ex-spouse problem, but it is prudent to protect against these two problems.

It is also possible to create a BCAPT while you are alive if you want to transfer valuable assets to your child or loved one now before you die.  We prepare BCAPTs for people who want to give valuable assets to their children or loved ones now and protect the assets from their future creditors and ex-spouses.  To learn more about the BCAPT see my article called “Beneficiary Controlled Asveset Protected Trusts.”

By |2021-08-21T10:36:05-07:00August 21st, 2021|

How to Set Up a Trust Fund if You’re Not Rich

Investopedia discusses how to set up a trust fund if you’re not rich:

Trust funds are designed to allow a person’s money to continue to be used in specific ways after they pass away, and to avoid their estate going through probate court (a time-consuming and expensive legal process). But trusts aren’t only useful for ultra-high-net-worth individuals, the middle-class can use trust funds as well, where setting one up isn’t out of financial reach.

By |2021-11-05T14:54:43-07:00December 22nd, 2020|

Do Domestic Asset Protection Trusts Work?

A domestic asset protection trust (DAPT) is an irrevocable trust established under the laws of a state that adopted a DAPT statute.  Currently 17 states have passed DAPT statutes.  These states are Alaska, Delaware, Hawaii, Michigan, Mississippi, Missouri, Nevada, New Hampshire, Ohio, Oklahoma, Rhode Island, South Dakota, Tennessee, Utah, Virginia, West Virginia and Wyoming.  Unfortunately Arizona does not yet have a DAPT statute.

A DAPT is an irrevocable trust that allows the trust maker to be a discretionary beneficiary and the trust’s assets are protected against claims made by the trust maker’s creditors.  The trustmaker retains access to the trust’s assets, but the assets are protected against many types of creditor claims.

A lawyer on a list serve I follow wrote:

“Why do people still push DAPTs? There are so many cases defeating them. And they are part of the bankruptcy estate unless they’ve been in existence for 10 years. I feel like it’s the 1970s again, and everyone is telling each other how stupid seat belts are and that cigarettes are healthy and help with weight loss. Talking about Wyoming vs. South Dakota vs. Alaska vs. Nevada is like discussing which brand cigarette is healthier. None of them are good. And there are much better options that have tons of case law backing them … like special power of appointment trusts.”

The following text was written by Nevada DAPT attorney Steve Oshins in response to the above comment.  Steve is a friend and my choice as the best domestic asset protection trust lawyer in the United States.

“I substantially agree with your comments about regular DAPTs for residents of non-DAPT states. However, not for residents of DAPT states where it’s 100% certain that they work.

But I disagree with your comment that “There are so many cases defeating them.” That is what the foreign APT proponents often say in order to try to substantiate FAPTs over DAPTs. However, after 23 years, there still isn’t even one non-bankruptcy, non-fraudulent transfer case where a regular DAPT did not work. Not even one. So I don’t understand how “there are many cases defeating them”. The dicta in the Huber case says that they don’t work for a non-resident, although I could go on and on about how the judge misapplied the law. But please list the “many cases” that say it doesn’t work. 🙂

The black letter law says that a regular DAPT works. And after 23 years, there still isn’t even one case (other than Huber dicta) that says that it doesn’t. Therefore, a regular DAPT certainly isn’t horrible, although when done for a non-resident you should always combine it with a charging order protected entity for an extra layer of protection. That, in and of itself, is so scary to a creditor that they simply go away or settle. That’s why we see almost no case law. A settlement is a victory. That is not how we do it, but a regular DAPT plus a charging order protected entity is a viable option. Not the best though.

That all being said, the granddaddy of all asset protection techniques in the 21st century is the Hybrid DAPT. Watch the free 7.5-minute Hybrid DAPT slideshow and sales tool at THIS LINK. I agree with you that a Power of Appointment Trust is a great option and better than a regular DAPT (for a non-resident). And it will always be my #2 alternative, although I see no reason to ever use #2. But the reason it falls short of the Hybrid DAPT is that our clients like to maintain as much control as possible. So relying on a power of appointment in the hands of another person rather than retaining the power of appointment and simply running income through your spouse or another person, will always be #2 to the Hybrid DAPT. It works well though because, like a Hybrid DAPT, it’s a third-party trust. So no disrespect to it and any comments I’m making aren’t intended to disparage it. It’s just not #1 to me. 🙂

Hybrid DAPT = A+; / POA Trust = A / DAPT + LLC = A- / DAPT = B+”

By |2020-11-05T04:01:52-08:00November 5th, 2020|

How to Set Up a Trust Fund if You’re Not Rich

Tim Parker’s article says:

If you’ve heard of trust funds but don’t know what they are or how they work, you’re not alone. Many people know just one key fact about trust funds: they’re set up by the ultra-wealthy as a way to protect passing on significant sums of money to family, friends, or entities (charities, for example) after they pass away.

However, only part of the conventional wisdom is true. Trust funds are designed to allow a person’s money to continue to be useful well after they pass away, but trusts aren’t only useful for ultra-high-net-worth individuals. Middle-class people can use trust funds as well, and setting one up isn’t entirely out of financial reach.

By |2020-08-19T10:16:45-07:00August 19th, 2020|

Estate planning gives peace of mind by making decisions you’ve been avoiding

St George News discusses the peace of mind that comes from having planned your future. The common elements of an estate plan include:

  • Revocable trust – Otherwise known as a “living trust.” While not appropriate for all situations, it keeps the estate private, protects against incapacity and helps to avoid probate. You also get to see how it works while still alive. For people that own a home, Brande said it is really crucial.
  • Pour-over will – A will can nominate guardians, appoint executors, include burial instructions and ensure that everything in the estate will go into a trust at the time of death to be dealt with according to documents.
  • Durable power of attorney – Used in the event of incapacity, this allows an agent to take necessary steps to place assets in a trust that may have been excluded.
  • Health care directive – This grants an agent the authority to act on your behalf and make medical decisions. Without this directive, physicians will consult the spouse or next of kin, and that can make any situation more complicated, Brande said, especially when there are many loved ones who all feel like they know what is best. In end-of-life situations, it will also direct providers when you want life-sustaining care to be withheld.
By |2021-11-05T15:05:46-07:00April 21st, 2020|

Can I Give My Kids $15,000 a Year?

Chambliss: “If you have it to give, you certainly can, but there may be consequences should you apply for Medicaid long-term care coverage within five years after each gift. The $15,000 figure is the amount of the current gift tax exclusion (for 2018), meaning that any person who gives away $15,000 or less to any one individual in one particular year does not have to report the gift to the IRS, and you can give this amount to as many people as you like. If you give away more than $15,000 to any one person in a single year (other than your spouse), you will have to file a gift tax return. However, this does not necessarily mean you’ll pay a gift tax. You’ll have to pay a tax only if your reportable gifts total more than $11.18 million (2018 figure) during your lifetime.”

By |2018-11-06T14:21:14-08:00November 9th, 2018|

How to make sure your estate plan won’t cause a family fight

Market Watch:  “Creating an estate plan is a gift to the people you leave behind. By expressing your wishes, you’re trying to guide your loved ones at a difficult, emotional time. All too often, though, well-meaning people do things destined to create discord, rancor and resentment among their heirs. What looks good on paper may play out disastrously in real life, says estate and trust attorney Marve Ann Alaimo, partner at Porter Wright Morris & Arthur in Naples, Florida. “People want to think everybody will be nice and do right,” Alaimo says. “Human nature is not always that way.” You can reduce the chances of family discord by doing these four things:”

By |2018-11-06T10:51:10-08:00November 8th, 2018|

Disabled daughter of ‘Dandy Don’ Meredith at center of allegations of abuse, neglect since his death

FOX:  “The daughter of the late legendary football star and sportscaster “Dandy Don” Meredith dealt with abuse and neglect after her stepmother took guardianship of her trust following Meredith’s death, relatives said. Meredith, a former Dallas Cowboys quarterback, “Monday Night Football” commentator and TV pitchman who often referred to himself as “Jeff and Hazel’s baby boy,” set up a trust to ensure lifetime care for his youngest child, Heather, now 49, who was born with physical and intellectual disabilities.”

By |2018-11-06T10:02:36-08:00November 6th, 2018|

Disney World, Disneyland custodians claim parks are popular spots to scatter ashes

FOX:  “Walt Disney World and Disneyland have allegedly been outed as one of the most popular places for families to scatter their loved one’s ashesAccording to The Wall Street Journal, custodians at the famous theme parks are claiming that not only do guests bring their family’s ashes to scatter – they do so often enough to prompt a special code word for it: HEPA cleanup, referring to an ultrafine vacuum cleaner.”

By |2018-10-29T14:35:59-07:00October 31st, 2018|

Paul Allen’s $26 Billion Estate Will Take Years To Unravel

Financial Advisor:  “Paul Allen’s family office will live long and prosper. The billionaire’s vast holdings at Vulcan Inc. — with real estate, art, sports teams and venture capital stakes — would take years to unravel, if that’s even what he wanted. Allen, who died Monday, had no spouse or children to divide his empire. But there are many others with interests at stake, including family, staff and charities, as well as potential investors eager to snap up pieces.”

By |2018-10-23T15:30:56-07:00October 24th, 2018|

Six important tips for estate planning success

Moneyweb:  “The increased Value-Added Tax (VAT) rate – announced in the 2018 National Budget – dominated headlines for weeks thereafter, but this is not the only tax change affecting consumers and investors. Many tax changes also affect estate planning and the cost of estate administration. I asked Brenthurst’s Fiduciary Services Expert, Rozanne Heystek-Potgieter, for her top tips to navigate this. We compiled a list of six important issues to consider when navigating the complex field of deceased estate administration. More importantly, we have included tips on how to prepare for the inevitable and re-evaluate your existing will, the liquidity of your estate and estate planning goals in general.”

By |2018-10-15T14:46:06-07:00October 18th, 2018|

Why Estate Planning Is Easy And Legacy Planning Is Hard

Forbes: Estate planning is easy. It’s finite, calculable. What happens when you die? Who gets your stuff? How much will you owe in estate taxes and how can we prevent or prepare for it? You hire a lawyer to draft a will and possibly one or more trusts that provide for what happens when you die. It’s done. Complete. You tuck your documents away in drawer or safety deposit box and sleep well at night, knowing you have taken care of your estate plan. Death is inevitable, so planning for it—while admittedly uncomfortable for some—is relatively easy. Life, on the other hand, is hard.”

By |2018-10-08T13:48:06-07:00October 8th, 2018|

What ‘Succession’ And Sumner Redstone Can Teach Us About Planning Ahead For Senior Care

Forbes:  “Many of us have read the titillating and tragic story of Sumner Redstone, the former executive chairman of Viacom, and the litigious financial power struggle that has embroiled his family. Redstone’s story was a key influence on the HBO hit series Succession, which involves a lot of money, a pugnacious media mogul, a conniving lover, and children trying to wrest control of the family fortune from a sordid mess. Most of us won’t need to worry about a multi-billion-dollar empire, and our family struggles may appear mundane by comparison. But disagreements over money can and often do prevent families from making the right choices about care.”

By |2018-10-01T11:18:07-07:00October 1st, 2018|

Burt Reynolds Left His Only Son Out of His Will and Created a Trust for Him Instead

People:  “Screen legend Burt Reynolds left his only son out of his will — but did not cut him out. The will, which was obtained by TMZ, says of Quinton, “I intentionally omit him from this, my Last Will and Testament, as I have provided for him during my lifetime in my Declaration of Trust.” The will, which was signed in 2011, appoints Reynolds’ niece Nancy Lee Brown Hess as the personal representative of Reynolds’ estate. Reynolds lists his great nephew Brian Ritchey Brown and then his great niece Tracy Erin Rogers as the next personal representative were anything to happen to the previous one.”

By |2018-09-24T12:10:35-07:00September 24th, 2018|

What happens if you die without a will? You might leave a hot mess behind.

The Washington Post: Don’t have a will? Then let me ask you this: Do you love your family? Because, if you love and care about them and want to minimize the drama that you may leave after you die, you would get a will. And I don’t mean something done on the computer that you sign and stuff in a folder. Actually, you have a will, just not one that you created. If you die “intestate,” meaning without having a legal will, state laws dictate how your assets will be distributed. Here’s a link on Nolo.com where you can see, according to your state’s law, who is entitled to your assets if you die without creating a will.”

By |2018-09-12T14:33:52-07:00September 12th, 2018|

Why it’s smart to plan your own funeral—and do it now

Market Watch:  “Although I didn’t know it at the time, a week after my father received a terminal cancer diagnosis, he asked my cousin to take him to a local mortuary where he made decisions about his burial and paid for his funeral. Following his death five months later, as a grieving only child, I was thankful my father had the foresight to plan ahead, as he had always done for other life events. His choice to preplan was a gift that prevented me from making emotional and costly decisions based in grief. Death is a subject none of us want to confront. Talking about death causes us to face mortality and run head-on into the fact that we will not always be here. Yet death is inevitable and planning your funeral is a lot like planning for retirement. It requires honest evaluation and sometimes hard decisions, but it’s something that needs to be done. Here are five reasons to overcome hesitancy and consider planning your funeral now.”

By |2018-09-04T12:44:33-07:00September 6th, 2018|

Navigating Special Needs Trusts for Children with Disabilities

SmithAdmundsen:  “Estate planning for parents of children with special needs can be overwhelming.  Not only do parents need to consider how to provide for their child after they are gone, but they must also consider issues relating to how an inheritance will impact federal and state aid eligibility. There are three different types of special needs trusts that allow funds to be held for a disabled individual, while allowing them to qualify for state and federal aid.”

By |2018-09-04T12:19:06-07:00September 5th, 2018|

Aretha Franklin had NO will: Singer did not outline plans for her $80million estate before her tragic death

Daily Mail:  “Aretha Franklin passed away at her home in Detroit after a long battle with pancreatic cancer last Thursday. And while the Queen Of Soul had been struggling with health for some time, the iconic star did not leave behind a will, according to reports from TMZ. The Respect singer’s estate is estimated to be worth around an $80million, according to People.

By |2018-08-22T10:24:09-07:00August 22nd, 2018|

Are You Ready for Longevity? 4 Steps to Take Now

Kiplinger:  “Did you know that a non-smoking 65-year-old woman today has a 50% chance of living until 88? A non-smoking 65-year-old man has a 50% chance of living until 85? That’s how life expectancy works – the longer you live, the more likely you will live longer. Given that you could be well on your way to becoming a nonagenarian, here are four smart moves to help keep you and your family protected as you age.

By |2018-08-21T16:15:24-07:00August 21st, 2018|

Family Affair: Potential Problems with Family-Owned Businesses

Ward and Smith:  “Some of the most heartbreaking situations we see in our closely-held business and estate practices are families torn apart over differences in dealing with family-owned businesses. When there are problems with family-owned businesses, people tend to think with their hearts, rather than their brains, and often take unreasonable positions that are counterproductive to reaching a satisfactory resolution.  Often, the personal relationships among the family members continue to suffer until the business issues have been resolved, and even for a long time afterwards.”

By |2018-08-06T16:26:39-07:00August 9th, 2018|

Your Money: How to deal With the Paperwork Scramble After a Spouse Dies

Reuters:  “When you are grieving a departed spouse, the last thing you want to think about is changing the title to your car. Same goes for your house, your bank accounts, the retirement account you are inheriting and anything else of value that now belongs solely to you. Married couples have a certain ease when it comes to inheritance rules, often leaving everything to each other in a mostly unfettered manner. Many people have what estate lawyers call “sweetheart” or “I love you” wills, which means that spouses leave all of their worldly possessions to each other. That is all good when one’s spouse passes away. The survivor, however, is left with a mess of details to sort through, because there is now only one name on all of those joint accounts, and that can cause problems for heirs down the road.

By |2018-08-06T14:24:36-07:00August 6th, 2018|

Having a Baby Changes Everything: Guardianship Considerations for Parents Creating Wills

SmithAmundsen:  “Once couples have children, they are eager to get a plan in place for who will take guardianship of their children. Having children and not having a will or a selected guardian means parents are left to worry about what would happen in the event of their untimely death. For example, if both parents die, leaving no will, and minor children, any money the parents had will pass to the children. For children under the age of 18, the court would then need to supervise any money the children inherit in a conservatorship. “

By |2018-07-30T14:34:37-07:00August 3rd, 2018|

Five Estate Planning Tips that Remain Relevant Regardless of Shifting Political Winds

Wealth Management.com:  “There are important estate planning techniques that aren’t directly affected by legislation and changes in tax law, but that can still make a big impact on wealth preservation. From regularly updating a will to consistently moving assets off a balance sheet, here are five estate planning items that should be added to your client’s to-do list. Schedule Routine (Estate Planning) Checkups Make sure clients regularly update their health care documents and wills. Ask clients to consider whether the individuals named in their documents are still appropriate.”

By |2018-07-30T13:04:16-07:00August 1st, 2018|

Executors Can Count On Long, Arduous Estate Settlements

Financial Advisor:  “If your client is the executor of a family estate, you can warn him or her it will take an average of 800 hours—that’s 20 full workweeks—to settle most estates. That is, if it doesn’t get bogged down in a battle over an amethyst ring or Green Bay Packers tickets, said EstateExec, a company based in the San Francisco area that creates software for estate executors. It takes an average of 16 months to settle an estate, no matter the size, according to an EstateExec survey of 1,200 people involved in estate settlements. For 80 percent of estates, it takes 800 hours of work by the executor to settle, the survey said, and nearly half, 44 percent, of those surveyed were part of, or were at least aware of, family conflicts that erupted in the settlement process.”

By |2018-07-16T13:35:24-07:00July 20th, 2018|

Protecting Your Pets: How to Make Financial Provisions in a Will or Trust

Fiduciary Trust International:  “For many people, pets aren’t property—they are members of the family in every sense of the word; providing emotional support, protection and comfort in good times and bad. In return, we give them shelter, affection and a significant amount of financial support. According to a Harris Poll survey, Americans spend an average of nearly $1,500 on essentials such as food, grooming, boarding and trips to the veterinarian’s office for their pets each year. Horses are the most expensive at roughly $13,000 a year. But making financial provisions for a pet who outlives you hasn’t always been possible, at least not formally. Trusts were designed originally to benefit humans or charity, not animals.”

By |2018-07-16T12:24:01-07:00July 17th, 2018|

Businesses Require Proper Estate Planning

Brooklyn Trust and WIll:  “While many people associate the process of estate planning with retirement and owning significant value in assets, the fact of the matter is that quite the contrary is actually true. Estate planning by definition is the process of preparing for the transfer of wealth after death, so if you own anything of value, estate planning becomes necessary if you wish to pass on your assets to any beneficiaries. Further, estate planning becomes particularly necessary if you own a business, as the law may not always coincide with your intentions regarding passing on ownership of the business after your passing.”

By |2018-07-09T12:05:07-07:00July 11th, 2018|
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