Estate Planning Attorney

Yes. Whether you have $5,000 or $5 million, you need to figure out who will manage those funds when you’re alive but can’t do so yourself because of long illness or dementia, and you need a way to be clear about who you want to inherit at your death. By the way, the less stuff you think you have, the less you can afford to get it wrong.

Wills only control what happens to your assets (stuff) when you die (i.e. no help for you now), and asset ownership rules trump a will (we talk about this at length in our free workshop – the 7 Hazards to Your Estate Plan). An informed, comprehensive plan includes tools for managing your medical and financial affairs during your lifetime and reviews the stuff you own and how you own it to make sure everything is coordinated to work with your will.

No. The joint owner can only help on the account where they’re named. If any legal or financial matter needs to be handled outside the account and you cannot do it yourself (for example, your tax return needs to be signed, your house needs to be sold, or your signature is needed to file for an insurance claim), your family will have to go to court and ask for the judge’s permission to act for your benefit (to become your conservator). Also, the joint owner is presumed to be – well – an owner, so the assets in the account may be subject to their creditors. Plus, or maybe another minus, this easy and cheap approach may result in disinheriting beneficiaries under your will or trust because the surviving owner(s) automatically own all of the account when you die and they do not have to share it with your intended beneficiaries.

A trust is a legal entity that holds and manages your assets (stuff). The document you sign to create the trust (the trust agreement) says who manages the stuff (the “trustee”) and who benefits from the stuff (the “beneficiaries”) during your lifetime and at your death.

No. After you’ve created your trust you must ask your bank (and other institutions) to change the title of accounts currently in your name and rename them to your trust. Sometimes, rather than retitle an account, the trust is made the pay on death beneficiary. Either way, this process involves contacting these institutions and companies and completing forms to update your accounts with them. If you’re working with an experienced estate planning attorney, you will receive explicit guidance on how to manage each asset to ensure it coordinates with your plan. Also, not all stuff can initially be retitled into a trust so the funding process must be done with expert guidance.

It depends on the type of trust. With a revocable trust – the most common type of trust our clients want – you have full benefit and use of your stuff in the trust, with married couples being able to decide what limits on the surviving spouse’s use occur at the death of the first. With an irrevocable trust you give up the right to get your stuff out of the trust forever.

The tradeoff for giving up access to your stuff is the benefit of protecting your stuff. Irrevocable trusts come in lots of varieties and can have lots of purposes. At Promise Law we create Asset Protection trusts. These types of irrevocable trusts create a firewall around your stuff: the protection is immediate for future general creditors (like from a lawsuit for someone getting injured on your property) and for Medicaid Long Term Care and will be a penalty-free transfer for Medicaid.

The above significant protections, even in the face of important caveats, are why people elect to create an Asset Protection trust. An Asset Protection trust may be funded with assets that the creator doesn’t want to liquidate and intends to preserve to share with beneficiaries at their death (family home, vacation property, an investment account used only for its income, etc.). They know that whatever they’ve put in the Asset Protection trust is protected.

Whether it’s a revocable trust or an Asset Protection trust, you can serve as your own trustee and can also change who manages your trust and who inherits from the trust at your death. After your death, the trust is managed by the successor trustee you selected, and your beneficiaries receive their inheritance as you directed in the trust, whether outright or held in further trust.

A trust is a more robust planning tool than a will because a trust provides asset management during your lifetime as well as directs how your estate is to be managed and distributed after your death. No one planning tool fits everyone: pros and cons exist for each type of plan. Promise Law believes that you should be informed about all the issues and options in planning and that you will be empowered to decide which one is better for you and your family. The best fit depends on your individual circumstances plus your personal goals and preferences.

If properly funded at their creation and carefully managed throughout your lifetime, trusts are hands down the best vehicle for seamless transition and management of your stuff if you become incapacitated during your lifetime. At your death, the successor trustee doesn’t have to file anything with the court and as a result the trust administration process is more efficient than with a will going through Probate. Trusts are also more flexible and forgiving if you should have updated the trust, perhaps to take into account a change in a beneficiary’s health, but did not or could not do so, before your death. If there are any issues with a will, you must go to court to untangle them. A similar issue with a trust can frequently be handled privately, quickly, and with less expense.