Articles Posted in Trusts

Creating a will and drafting trust documents are forms of “transactional law.” That means that, unlike litigation, the purpose is not necessarily to “win” in a conflict over another. Instead, the purpose is to put plans into place that explicitly avoids conflict down the road.

When doing this work it is critical to understand the details of the law to ensure documents are crafted and structured in ways that meet legal requirements and have the intended legal effect. But, in many cases, particularly estate planning issues, knowledge of the law alone is often insufficient to help prevent conflict. That is because, these issues are wrought with emotions. The interplay of family values, personal relationships, resentments, financial stress, and other matters are all wrapped up in the process. Working to prevent conflict therefore requires consideration of all of these issues in addition to simple knowledge of the letter of the law.

Feuding Siblings

There will soon be a new chief in town when it comes to monitoring the activities of New York charitable organizations. According to a report last week in the Wall Street Journal, James Sheehan was named the head of a state agency known as the Charities Bureau. This entity may not be a well-understood by most community members, but it plays a role in trust regulation and other activities which hit upon estate planning matters.

The New Chief

Mr. Sheehan is well known to many in the estate planning elder law community as the former New York Medicaid inspector general. The inspector general is charged with acting as a check on the system to watch out for misdeed and violations. It is that same commitment to enforcement and transparency in activities that Sheehan will take to the new office.

Famed rock music promoter Bill Graham made his name as the organizer of popular music festivals and concerts. His events are credited for launching the careers of legendary groups like the Grateful Dead, Jefferson Airplane, the Eagles, and many others. Unfortunately, Graham’s life was cut short over twenty years ago, as he died in a helicopter crash in 1991.

In a testament to the longevity of many estate battles, just last week, a lawsuit involving Graham’s estate was revived by a federal court. The case is yet another reminder of the need to be very careful about all aspects of estate planning–from use of trusts to selection of executors–in order to give your family the best possible chance of handling these matters without conflict.

The Estate Battle

An important element of estate planning is ensuring the financial security of your family after you are gone. Like most people, we have worked our lifetime to provide financial stability for not only ourselves but our loved ones. An easy, burden-less way of providing for your loved ones is through a living trust.

As outlined here, a living trust holds many advantages compared to a will. Establishing a trust is fairly easily. Upon creating the living trust agreement, you essentially transfer a portion, or all, of your assets to a trustee. To retain control of the assets, people sometimes name themselves as the trustee. A grantor must name beneficiaries to the trust who will inherit the trust upon your death. Establishing a living trust bank account will allow you to solidify your savings while also easing any financial burden on your beneficiaries. The provisions of the trust can always be changed, or if you have second thoughts the entire trust can be revoked.

A living trust provides three important factors. Firstly, living trusts avoid the probate process. At the time of the person’s death, the assets of the trust will pass directly to the named beneficiaries. Secondly, living trust provide privacy that wills cannot by avoiding probate. A last will and testament that has been admitted to probate becomes a public record that anyone can freely see and read. In contrast, a living trust agreement, the property, and the beneficiaries remain private. Lastly, a living trust avoids a will contest. A living trust goes into effect the moment it is created, and a contestant must prove the grantor was incompetent or under the influence at the time the trust instrument was signed and the assets were transferred. This is a very hard, possibly impossible, burden to overcome.