WHEN SHOULD YOU REVIEW & REVISE YOUR WILL OR REVOCABLE TRUST?

It is not unusual for clients to wait 20 years or longer before re-reading their wills or revocable trusts to determine if they still “work.” This occasionally creates expensive or frustrating problems. Continue reading

WILLS FOR SECOND MARRIAGES

Estate planning for second marriages is difficult. There is a constant tension between ensuring the continued support of the surviving spouse and ensuring that the decedent’s children are not disinherited. Here are some options and recommendations. (In the interest of brevity, I will use “husband” to refer to the first spouse to die, and “wife” to refer to the surviving spouse.) Continue reading

DISADVANTAGES OF LIVING TRUSTS (Part 3) – BEWARE OF THE THREE RING BINDER

I frequently meet clients whose living trust is a 50+ page agreement mounted in a padded red or green three-ring binder containing 150 pages or more. Although there are exceptions, many of these packages are generated through a one-size-fits-all template distributed through a national vendor. Typically, 1/3 to 1/2 of the pages are irrelevant to the client’s particular circumstances. Sifting through countless pages to glean the essence of the plan is frustrating and unnecessary.
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DISADVANTAGES OF LIVING TRUSTS (Part 2) – THE TYRANT TRUSTEE

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.

WHAT IS A TRUST?

Is a trust the same as a corporation, LLC or partnership? No!! It’s a completely different animal.

A trust is merely a contract between two parties. One party to the contract transfers property to the other, who is known as the “trustee.” The written trust agreement spells out what the trustee is supposed to do with the property. The trust agreement should also contain a slate of successor trustees who will serve if the original trustee resigns or is unable to serve.
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