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REVOCABLE LIVING TRUSTS ARE NOT MAGIC

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People are sometimes confused by the term “Revocable Living Trust.” Unscrupulous companies and websites often take advantage of this confusion as a way to get people to purchase a Revocable Living Trust form from them. These companies and websites make people think that there is something magical about a Revocable Living Trust. However, to understand whether you need a Revocable Living Trust, you need to understand what is truly meant by the term.

The words themselves are not magical and they do not create a magical legal document that is perfect for everyone. First, a Trust is a legal entity that holds property and assets for the benefit of someone or something else. The property is held in “trust.” Revocable and living merely mean that the Trust is created while you are living and that you have the right to revoke the Trust and retain the assets that you put into it. For many people, this is an excellent estate planning method as any assets put into the Trust while you are alive do not have to go through Probate after you pass away. However, some people should use different legal methods in their estate plans, often for tax reasons.

To know whether a Revocable Living Trust is right for you, talk to an experienced estate planning attorney.

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One thing that makes estate planning fun is that everyone’s situation is unique. Every client that comes into an estate planning attorney’s office has a different story to tell and different estate planning goals. The fun part for attorneys is not only in listening to all of the different stories, but also in developing an estate plan that meets each client’s unique situation.

For example, many people go to an estate planning attorney with the idea that they need to get a Living Trust. Most people will actually end up with an estate plan that does include a Trust. The questions become what kind of trust? How is it structured? Is it revocable or irrevocable? Does it include a Trust Protector? Can it be amended? Who will serve as the Trustee? The answers to these questions and others like them make each Trust a little different. The estate planning attorney finds those answers by listening to what the clients say.

In today’s world, you do not have to go to an estate planning attorney to get a Living Trust. There are other options. However, you should go to an attorney so that you can be certain that someone has listened to your story and created a Trust that is right for you.

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When you pass away, it’s often necessary for someone else to be able to access your email account. Many business deals today are done almost solely by email and to properly wrap up your affairs, someone will need to check your email to make sure that there is nothing that needs to be acted upon.

Accessing someone else’s email is difficult without a password, however. The person attempting to access your email will need to get the information from your email provider. The provider will not release that information to just anyone. For example, Gmail requires a death certificate, a power of attorney and other types of personal documents to prove identity. Yahoo will only release the information with a specific court order granting access to the email account. Other companies have different requirements.

The best solution is to leave your password somewhere that your heirs can find it. That does not mean a desk drawer where they can find it now. Leave the password in a safety deposit box or other secure location that only you can access. If you do not have that type of secure location, ask your attorney to keep the password secure and to release it upon your death.

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It’s hard to think of almost anything good that has come out of the scandal at Penn State. When children are abused, it’s never good. Now that Jerry Sandusky has been convicted by a jury of his peers, however, it’s time to ask what we can learn from the scandal. There are certainly a lot of lessons that should be learned by university administrators and athletic departments, but this is an estate planning blog. As it turns out, there is an estate lesson in the scandal too.

If you know anything about the scandal, you have heard the allegations that head football coach knew about Sandusky’s abuse of children and helped to cover it up. Of course, that may not be the case and we might never know what happened as Paterno passed away shortly after the scandal broke. He did not tell his side of the story. However, his family might not have gotten the lesson about keeping things from public consumption as they requested that Paterno’s Will be sealed by the Court. After a media outcry, the family backtracked in a couple of days and released the Will to the public.

As it turns out, there was nothing controversial in the Will and it was originally sealed for privacy reasons. However, the lesson to be learned is that when you hide things from a public that wants to know, you create more speculation than the situation often calls for.

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Our legal codes often do a particularly poor job of keeping up with how people actually live. Our legal system developed out of the traditions of Medieval England and were refined in the 19th and early 20th centuries. Throughout those times periods, a man and a woman got married and typically stayed married until they passed away. Our estate laws assume that’s what everyone does. However, today, many men and women move in together without ever getting married. This can create problems if one of them passes away.

In a typical New York scenario, one person might own a nice walk-up brownstone. When the couple decides to move in together, the other person moves into the brownstone but is never put on any titles or deeds. What happens if the owner passes away without an estate plan? The law does not have provisions that give ownership to the other person, even if he or she has contributed towards household expenses and the mortgage. Instead, the walk-up will go to the deceased owner’s relatives. Things get even more complicated if the unmarried couple jointly own property.

It’s now socially acceptable to live together out of wedlock, but that does not mean that the law has kept up with the times. It hasn’t. Talk to an estate planning attorney if you are not married to your live-in boyfriend or girlfriend

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People who create their own estate plans often make the mistake of thinking that they only need to use one legal instrument and that it will take care of everything. This is usually a Revocable Living Trust. While a Living Trust is a great estate planning tool, it is probably not the only thing you need. Estate planning is more like putting a puzzle together to find the right fit between various legal instruments to effectuate your goals.

A Revocable Living Trust is only effective for the property that you transfer to the Trust. If you forget to transfer something or are unable to transfer something for some reason, than the Trust has no legal authority over that property. If you pass away before you can transfer everything into the Trust, the Trust will also not be effective. The normal solution for this problem is to execute a Pour Over Will. This is a very simple Will that directs that any property in your estate should be transfered to the Trust. That allows the property you didn’t transfer to be distributed according to the terms of the Trust.

There might be other estate planning instruments that you want to use with your Revocable Living Trust. Each person’s estate planning puzzle is different. An attorney can help you solve your puzzle.

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A question that often comes up in estate planning is “How much money do you need to get a Trust?” The question is a fundamental misunderstanding, but a common one. Although there would not be much point in doing so, you can put as little as a single penny into a Trust.

The question is based on the premise that Trusts are designed for rich people. It’s a false premise. Trusts are designed for anyone who either wants to give something for one person to manage for the benefit of someone else or who wants to have their estate avoid Probate. Imagine that you have a minor niece that you want to leave a thousand dollars to. That’s a lot of money for most children and they can be expected to want to blow it as soon as possible. Instead of giving it to your niece directly, you can put it into a Trust. It can earn interest and be made available to your niece when she comes of age.

Trusts are also a great way for everyone to avoid having their estate pass through Probate. If you put all of your assets into the Trust, those assets will be divided according to the terms of the Trust without court intervention. It does not matter how much you have. If you have something, you can use a Trust.

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Everyone knows that there are more important things in life than money. However, when we feel aggrieved, it’s often hard to remember that, especially after the death of a loved one. This sometimes leads to poorly thought out estate challenges after someone does not receive an expected inheritance.

There is no doubt that it hurts when you do not receive the inheritance you expected and think you deserve. Before deciding to challenge the estate, however, take a few moments to consider the consequences. Your relationship with the people who did receive the inheritance will never be the same. They will have to fight you over what they perceive as their rightful inheritances. In many, if not most cases, the relationship is damaged irreparably. Sometimes, other family members who do not have a stake in the outcome are forced to choose sides and your relationship with them could be damaged as well.

That’s not to say that you necessarily should not challenge an estate, if you did not receive the inheritance you hoped to receive. You just need to consider all of the consequences. By all means, you should get what you deserve, especially if there has been fraud involved in an estate plan, but do know what you are in for before you proceed.

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One of the most important decisions that you will ever make is who you should appoint to make your health care decisions when you are no longer able to do so. The designation is made in a Health Care Proxy document. Most people instinctually think that they should name a spouse or family member. That is often the best person to appoint. However, there are other things to consider.

The person that you appoint needs to be able to effectively communicate with doctors and other medical personnel what your wishes are. That means that he or she must not only be able to express your wishes, he or she must know what they are. Some people are not comfortable talking about important health care decisions long before they need to be made. It can be uncomfortable for family members sometimes, but you need to be able to talk to the person you designate about what you want.

You also need to take care to appoint someone who is available to communicate with doctors and who you anticipate will be available long into the future. Hopefully, you will not need the Health Care Proxy for years to come so it does not make sense to designate someone in it who may not be around when you do need it.

Who you designate is up to you. Talk to your attorney about who the right person is for your situation.