Showing posts with label trustee. Show all posts
Showing posts with label trustee. Show all posts
Monday, January 5, 2009
A Busy Family's Guide to Living Wills & Trusts
The Delta Township District Library hosts "A Busy Family's Guide to Living Wills & Trusts" Monday, January 5, 2009 from 6-7:30pm in the Elmwood Room. Written materials will be provided. No charge to attend. For more information, call Jo Anne Hinds at (517) 285-5353.
Monday, October 20, 2008
Trust Presentations at the New Delta Township Public Library
Late last week I finalized plans to present a series of 3 programs about wills and trusts at the new Delta Township District Library off of Elmwood Road, just east of Lansing Mall.
Here's a map if this area is unfamiliar to you.
If you haven't yet visited the facility - you should! It is a beautiful structure that blends in well with the surrounding landscape, especially in autumn.
Surprisingly, the library website doesn't showcase a picture of the new building, so as a big fan of architecture, I decided to post one here.
Here are the dates and titles of the presentations - more details to follow. The January 5, 2009 class includes a valuable overview of the purposes of various estate planning documents that would be very helpful for someone who has recently undertaken the role of serving as a trustee.
January 5, 2009: The Busy Family's Guide to Wills & Trusts
February 2, 2009: Living Trusts for a New Generation
March 2, 2009: Get Your Ducks in a Row - Wills & Trusts for Young Parents
Email me for more details about these or other upcoming learning opportunities.
Wednesday, October 15, 2008
"What if I don't want to be a trustee?"
Monday evening I presented a program about wills and trusts at the East Lansing Public Library, and during that presentation someone asked what would happen if there was no one in their family that would undertake the job of being trustee of their revocable living trust.
Becoming a trustee requires that you "accept" the job - which is like becoming bound or obligated to fulfill the trust agreement - and if for some reason you can't do that job, you can decline to accept the trust or even resign if you have already started.
But then what? What happens next? Who will take over? Hopefully the creator of the trust named a successor trustee in the trust document that is willing and able to take on the trustee's responsibilities. But what if there is no one else designated?
Some trusts contain provisions allowing competent adult beneficiaries to choose a next successor trustee, others require a court to become involved in the appointment process.
What if there is no one in the family willing and able to serve? A professional trustee (like an attorney or other professional advisor), a financial institution or corporate trustee may be nominated and appointed through a probate court process and will administer the trust for a fee.
If you've created a trust to keep your estate out of court, you can see why your choice of trustee (and a few reliable alternates) is a very important decision.
Becoming a trustee requires that you "accept" the job - which is like becoming bound or obligated to fulfill the trust agreement - and if for some reason you can't do that job, you can decline to accept the trust or even resign if you have already started.
But then what? What happens next? Who will take over? Hopefully the creator of the trust named a successor trustee in the trust document that is willing and able to take on the trustee's responsibilities. But what if there is no one else designated?
Some trusts contain provisions allowing competent adult beneficiaries to choose a next successor trustee, others require a court to become involved in the appointment process.
What if there is no one in the family willing and able to serve? A professional trustee (like an attorney or other professional advisor), a financial institution or corporate trustee may be nominated and appointed through a probate court process and will administer the trust for a fee.
If you've created a trust to keep your estate out of court, you can see why your choice of trustee (and a few reliable alternates) is a very important decision.
Monday, October 6, 2008
Settle Trust Disputes with Mediation
Simplify the administration of your estate with a living trust!
Many individuals are "sold" on the idea of using a living trust in their estate with the promise of an easier administration for their family - but what happens when the trustee and the beneficiaries can't agree on how the trust should be administered?
Probate litigation to determine the intentions of the trust's creator may be necessary to interpret the trust agreement - but wasn't the living trust supposed to avoid probate? Aren't there any other options?
Trust mediation is one option that might feel more appropriate to a trustee. Mediation will help the family resolve the dispute while honoring the trust creator's intention to keep the trust private and out of the court system.
While there are different types of mediators, some take a facilitative approach, trying to help the parties reach an understanding that will address the underlying emotions of the family following the death of a loved one.
Mediation can be a valuable tool in administering a living trust. More to come on this topic...
Many individuals are "sold" on the idea of using a living trust in their estate with the promise of an easier administration for their family - but what happens when the trustee and the beneficiaries can't agree on how the trust should be administered?
Probate litigation to determine the intentions of the trust's creator may be necessary to interpret the trust agreement - but wasn't the living trust supposed to avoid probate? Aren't there any other options?
Trust mediation is one option that might feel more appropriate to a trustee. Mediation will help the family resolve the dispute while honoring the trust creator's intention to keep the trust private and out of the court system.
While there are different types of mediators, some take a facilitative approach, trying to help the parties reach an understanding that will address the underlying emotions of the family following the death of a loved one.
Mediation can be a valuable tool in administering a living trust. More to come on this topic...
Friday, September 26, 2008
A Living Trust is Like a Basket
How do living trusts keep assets from being subject to probate? To answer that question, you need to know a little bit about the probate court process. Assets that are subject to probate might include items that are in your sole name when you die, with no surviving designated beneficiary.
Here's a very simple example. Bob and Betty Brown are married and own most of their assets jointly. Bob has a life insurance policy and retirement accounts. He has designated Betty as his sole beneficiary. Betty dies before Bob.
Bob now owns all of the couple's jointly held assets himself, with no other joint owner. Prior to changing the beneficiary designations on his life insurance policy and retirement accounts, Bob also dies. Bob's probate estate might consist of all assets which were jointly owned with Betty during his lifetime, and assets he owned in his own name without surviving beneficiaries designated.
In contrast, if Bob and Betty had transferred their assets into a joint revocable living trust, their jointly owned assets would not have been owned by either Bob or Betty at the time of their deaths (because they were owned by the trust). Because the assets are owned by the trust and not by the person who died, they are not subject to probate.
Bob will still have to be careful to designate a new beneficiary for his life insurance and retirement accounts - or he could simply name a contingent or alternate beneficiary at the outset which would cover the possibility that Betty might die first.
Simply put, a living trust is like a basket. To fund a trust, you place your assets in the basket (i.e. you change the title of the assets so that they are owned by the trust and not by you). Although with most trusts you can still control the basket and its contents as the creator of the trust - they don't technically belong to you anymore, they belong in the basket.
As a trustee, you may be responsible for taking care of the assets in the basket, but you don't have the right to take anything out of the basket for yourself unless and until the trust agreement allows it. Think of the trust agreement as a set of rules which govern how the assets in the basket can be used and to whom they should ultimately be distributed.
If the creator of the trust has become disabled and is unable to transfer his or her assets into the trust, in some circumstances it may be possible for other fiduciaries to take action to fund the trust. More about this in future posts...
Here's a very simple example. Bob and Betty Brown are married and own most of their assets jointly. Bob has a life insurance policy and retirement accounts. He has designated Betty as his sole beneficiary. Betty dies before Bob.
Bob now owns all of the couple's jointly held assets himself, with no other joint owner. Prior to changing the beneficiary designations on his life insurance policy and retirement accounts, Bob also dies. Bob's probate estate might consist of all assets which were jointly owned with Betty during his lifetime, and assets he owned in his own name without surviving beneficiaries designated.
In contrast, if Bob and Betty had transferred their assets into a joint revocable living trust, their jointly owned assets would not have been owned by either Bob or Betty at the time of their deaths (because they were owned by the trust). Because the assets are owned by the trust and not by the person who died, they are not subject to probate.
Bob will still have to be careful to designate a new beneficiary for his life insurance and retirement accounts - or he could simply name a contingent or alternate beneficiary at the outset which would cover the possibility that Betty might die first.
Simply put, a living trust is like a basket. To fund a trust, you place your assets in the basket (i.e. you change the title of the assets so that they are owned by the trust and not by you). Although with most trusts you can still control the basket and its contents as the creator of the trust - they don't technically belong to you anymore, they belong in the basket.
As a trustee, you may be responsible for taking care of the assets in the basket, but you don't have the right to take anything out of the basket for yourself unless and until the trust agreement allows it. Think of the trust agreement as a set of rules which govern how the assets in the basket can be used and to whom they should ultimately be distributed.
If the creator of the trust has become disabled and is unable to transfer his or her assets into the trust, in some circumstances it may be possible for other fiduciaries to take action to fund the trust. More about this in future posts...
Thursday, September 25, 2008
HIPAA and Trustee Disability
Many living trusts have rules in them about the transfer of power from one trustee (sometimes the person who created the trust), to the next (or successor) trustee. Of course, if a serving trustee dies, its apparent that there is a need for the next successor trustee to take over.
But what happens when a serving trustee begins to suffer from Alzheimer's Disease or another disabling illness? As the next successor trustee, how do you know at what point you should remove the serving trustee and assume the role yourself?
Trust agreements commonly include a definition of disability or incapacity. Often, a determination that an individual is disabled requires a written statement from at least one or more physicians.
The difficulty arises when you, as the next successor trustee, are not authorized under the federal privacy law known as HIPAA (Health Insurance Portability and Accountability Act of 1996) to obtain medical information about the serving trustee sufficient to determine whether they are capable of serving as trustee or not.
To address this issue, some trust agreements now contain a statement indicating that the creator of the trust requests that each successor trustee sign a statement authorizing the release of medical information to a subsequent successor sufficient to determine whether or not they are capable of serving as trustee. One way to do this might be to incorporate such a statement into the successor trustee's acceptance of trust.
But what happens when a serving trustee begins to suffer from Alzheimer's Disease or another disabling illness? As the next successor trustee, how do you know at what point you should remove the serving trustee and assume the role yourself?
Trust agreements commonly include a definition of disability or incapacity. Often, a determination that an individual is disabled requires a written statement from at least one or more physicians.
The difficulty arises when you, as the next successor trustee, are not authorized under the federal privacy law known as HIPAA (Health Insurance Portability and Accountability Act of 1996) to obtain medical information about the serving trustee sufficient to determine whether they are capable of serving as trustee or not.
To address this issue, some trust agreements now contain a statement indicating that the creator of the trust requests that each successor trustee sign a statement authorizing the release of medical information to a subsequent successor sufficient to determine whether or not they are capable of serving as trustee. One way to do this might be to incorporate such a statement into the successor trustee's acceptance of trust.
Tuesday, September 23, 2008
Minimizing the Shock
I'm a lawyer in Michigan working in the field of wills, trusts and estates. As part of my practice, I teach community education classes. Often, seminar participants bring along their friends or siblings to my classes. At one particular seminar, the discussion was centered around how to tell the person you've chosen as your successor trustee what their role may someday be in your estate.
One woman turned to her sister and said in disgust, "I can't believe anyone would put someone's name down for something like that and not tell them about it." Her sister paused a moment and then said hesitantly, "did I ever mention that I named you as my trustee?"
Living trusts are popular with consumers in Michigan today, in part, because they promote the possibility of an estate administration simplified and at less cost than a traditional probate administration.
This blog is created for the purpose of providing a forum for individuals who have been named as a successor trustee in a living trust agreement or are currently serving as a trustee.
Questions and comments are welcome.
One woman turned to her sister and said in disgust, "I can't believe anyone would put someone's name down for something like that and not tell them about it." Her sister paused a moment and then said hesitantly, "did I ever mention that I named you as my trustee?"
Living trusts are popular with consumers in Michigan today, in part, because they promote the possibility of an estate administration simplified and at less cost than a traditional probate administration.
This blog is created for the purpose of providing a forum for individuals who have been named as a successor trustee in a living trust agreement or are currently serving as a trustee.
Questions and comments are welcome.
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