Tips and general information from David C. Streicher, an inactive Portland, Oregon attorney (licensed in Oregon and Washington, with 30 years of experience) specializing in estate planning, small business and tax planning who welcomes your comments or questions at firstname.lastname@example.org
Everyone should have a living trust. Avoid probate at all costs. Avoid horrible death tax bills. Avoid exorbitant executor fees and legal fees. The list goes on and on. While there is a grain of truth in these arguments, you should take a closer look before expending resources on a living trust. Here’s why. Continue reading →
Estate litigation occurs with increasing frequency. Perhaps the most frequent challenge (known as a “will contest”) is a suit alleging that the will is invalid because the signer had inadequate mental capacity or was under the influence of others. In practice, only wills of sick or elderly individuals are challenged. Continue reading →
A seldom-mentioned downside to living trusts is the trustee’s lack of accountability to any court. Usually this is a good feature, and saves time and money for everyone. But not always.
Court oversight serves no purpose when the parents are the trustees, since it is their money and they should not be accountable to anyone. But it can be a big deal when a child becomes successor trustee, whether before or after the death of the last surviving parent.
For whatever reason, the successor trustee is seldom transparent in sharing information with the other beneficiaries, who are usually siblings. Human nature being what it is, the beneficiaries assume the worst, i.e., that there is a reason the trustee is keeping them in the dark. For example, since not required by the Oregon Uniform Trust Code, the trustee may feel there is no need to prepare or circulate an inventory of what is on hand. Unless prodded, the trustee may also decline to provide an accounting of receipts and disbursements. The trustee may take excessive trustee fees or pay personal expenses from the trust. The court does not police these items.
It is true the beneficiaries have limited rights under the Uniform Trust Code to file suit to obtain information, etc., but they must hire an attorney to do so. In a probate (or a conservatorship), the executor is required by law to share information, and must secure court approval prior to taking executor fees.
Beware of the rogue successor trustee when using a revocable trust.
Living trusts (also known as revocable trusts) are will substitutes that are frequently promoted as an “avoid probate” panacea everyone should have. As in TV commercials for medications, however, I need to share several unfavorable “side effects.” Continue reading →