Trusts Archives - Page 3 of 4

Why Trusts are Still Relevant in a Post-Estate Tax World

Posted on December 21, 2016

The Trump Administration is about to join forces with a Republican Legislature, meaning there is a huge chance that the federal gift and estate taxes could be repealed. I have heard many of my colleague bemoan the fact that their bread-and—butter (complex estate tax-saving trusts) will become irrelevant, their careers are over, and how they wish they went into Medical School or they are moving to Canada in January or something else equally insane. While trusts have been useful devices to preserve a spouse’s estate tax exemption for Credit Shelter Trust purposes, this has by no means ever been their only purpose. Indeed, plenty of people already have trusts for a multitude of other purposes that shall continue to

Trusts: How to Protect a (Troubled) Child from Your Money

Posted on December 3, 2016

Parents: You are responsible for the financial education and well-being of your child. You have more life experience, you are the ones who brought your children into the world, and you are the one leaving your money to them. So take the extra step and make sure you give your children money in a responsible way. We’ve all heard of it: The child who spent all of his inheritance before he received it, the gambler, the substance abuser, spendthrift, and so on. In 2011, I had a 29 year old female client, whom I shall call “Janice” who didn’t have one penny to her name: Janice was living in a homeless shelter, on all types of public assistance, and almost thoroughly ignored

Leaving the Right Gift to the Right Person

Posted on September 30, 2016

I meet several clients who, upon death, want to automatically give their daughters their jewelry and split their remaining property equally between their children. This is also the default position suggested by general practitioner attorneys who will draft a two page Will for their lifetime client, and avoid the consultation time needed to truly understand their client’s desires. My experience suggests that serious consideration must be given to distributing the correct amount of property, and the right type of property, to each beneficiary. Most people leave property first to their spouse, then to their children equally – they have equated equally loving their children with bequeathing them equal amounts of property. It goes without saying that even in “healthy” families this may not be

Should I Serve as an Executor?

Posted on August 16, 2016

Most client I meet with name their most trusted family member or friend to serve as Executor of their Will when they pass away. Upon their death that person usually does serve; I would say approximately 90% of proposed Executors do serve in this position (if they themselves are still alive). These people think it will be “fun”, or that they “deserve to be in control” of the Probate. And then the wheels fall off: The Executor finds out that the decedent was a hoarder and has to clean out dumpsters of worthless garbage; beneficiaries fight, are impatient and ungrateful; collecting assets is hampered because they weren’t in easy-to-find places; the Executor lives in Los Angeles, but the decedent’s estate is being Probated

Keeping Your Trust Private

Posted on July 22, 2016

As followers of my blog know, I am a proponent of passing property using a Trust instead of a Will. While a Will is a contract between the deceased individual and the State in which it is Probated, Trusts are contacts between the Creator and Trustee of the trust. Wills submitted to the Surrogate’s Court are public knowledge (as are the decedent’s assets), while Trusts are private documents. It is this last point that we are discussing here. In order to make a Trust “effective” you have to fund the Trust. The owner on the Deed is now “The John Doe Revocable Trust” (not “John Doe”); the beneficiary of the life insurance policy is likewise the Trust. An unfunded Trust is more effective

The Missing Pre Nup: Add a Family Trusts Band Aid

Posted on May 20, 2016

Attention parents with assets: Tell your children they must have a prenuptial agreement! And when they respond “No, I love him, that is not romantic, we will be together forever!”……panic!!! Then take a breath…PANIC a little more, then contact your T&E attorney to discuss how to protect your family assets using a family trust with a suitable trustee. The Family Court (more appropriately called the “Divorce and Fleece Court”) is known as a “court of equity”, meaning it can look at any factor relating to assets and income, and make a completely subjective (some may say arbitrary) decision as to who gets what. When a child is too shy or stubborn to get a prenuptial agreement, it is your job

Quiet Targets: Protecting Single Aging Men

Posted on April 22, 2016

While single men tend to pass away at younger ages on average than married men, I have met a number of aging single men without children. Unlike aging single women, who tend to both emote their needs and take steps to elicit sympathy and the help they require, aging single men tend to continue toughening up, not ask for help from others, and ignore seemingly unimportant health concerns that turn out to be rather serious. Single men often do not age well, are financial targets, and tend to do age without the familial concerns their female counterparts receive. They also tend not to ask their male friends for help. If you have an uncle, brother or male friend who doesn’t

Smart Ideas for Making Your Agents Known (When Needed)

Posted on June 27, 2015

Too many attorneys make the mistake of not informing a person’s Power of Attorney, Health Care Agent or Executor that he/she has been named as a person’s agent or, even worse, not telling a client how to inform these people of their responsibilities. These practitioners appear to have the attitude of “I’ve been paid, you have your legal documents, let’s both move onto the next thing in our lives.” While this does not rise to the level of legal malpractice, it certainly is inconsiderate and potentially dangerous: These documents are not public record. If there is an emergency, how is a Health Care Agent going to be identified by the admitting health care facility? The documents may be hard to

Requiem for ILITs (Irrevocable Life Insurance Trusts)

Posted on February 24, 2015

My study group of like-minded Trusts and estates attorneys recently got together to discuss the ins-and-outs of ILITs. After a somewhat half-hearted review of the features and benefits of these trusts, we slowly realized the sad truth: It was time to bury these time-honored tax-saving mechanisms. An Irrevocable Life Insurance Trust (“ILIT”) is—surprise—an irrevocable trust that both owns and is the beneficiary of a life insurance policy. When estate tax exemptions were much lower several years ago, meaning that more people were paying a “death tax,” these trusts were ideal because, at death, the life insurance policy was paid to the trust and, when done correctly, transferred the proceeds free from estate taxes. This, coupled with the absence of income

2015: The Year Trusts and Estates Goes Elder

Posted on December 23, 2014

A new year is upon us, and for those of us in the estate planning world it is time to define who we are and what we shall do in the coming months. The modern concept of the American attorney who specializes in tax, trusts and estates dates back to 1913, the year the Sixteenth Amendment of our Constitution was ratified, allowing the federal government to tax people’s income. This was followed by the Revenue Act of 1916, allowing a “death tax” on people’s estates. For one hundred years the profession has concerned itself with using exemptions, loopholes and other transfer mechanisms focused primarily on maintaining intergenerational wealth by saving money on taxes. For the umpteenth year in a row