In the fall of 1990, some thirty plus years ago, your writer first heard of the proposition that if you set up a living trust your estate doesn’t have to go to court to settle – the so-called probate court proceeding for wills. Having spent the previous eleven years as a litigation attorney, and having faced numerous problems probating wills, this sounded too good to be true.
At the time, some of the best estate planning lawyers were in Florida. Perhaps you can guess why. In any event, off I went to Florida to train as an estate planning lawyer and, upon returning, closed the litigation practice and founded Ettinger Law Firm in April 1991, to keep people just like you, dear reader, out of probate court.
The reason I was so excited about the living trust, and continue to be so to this day, is the concept of taking back control from the courts and government and giving it back to you and your family. After all, who doesn’t want control over their affairs?
Many people are curious about what happens after they are no longer able to manage their assets. Many chances are created when it comes to estate planning arrangements and trusts play a large role in estate planning. If you choose wisely, trusts fortunately can prove to be an excellent way to reduce the taxes ultimately placed on your estate.
Establishing a Trust
Trusts are a type of arrangement used to the advantage of entities or people that the trust creator selects. Trusts vary greatly in activation as well as how they are accessed. Trusts tend to break down into the following kinds:
Imagine you’ve finally met with your attorney to establish an estate plan and are now considering whether to establish a trust. Or a situation where you already have an estate plan that includes a revocable trust. In today’s world of estate planning, revocable trusts have proven to be a common but effective tool for achieving a person’s estate planning goals. This article reviews some of the important details that you should consider about the reality of revocable trusts.
# 1 – Revocable Trusts Are the Same as Revocable Living Trusts
A person can create a revocable trust during their life and maintain the power to revise the trust at any time. Revocable trusts are referred to by various names including a living trust, a revocable living trust, and an inter vivos trust. The terms of a trust are substantially more important than what a trust is called. The critical aspect that distinguishes revocable trusts from other kinds of trusts is the authority to either amend or revoke the terms of the trust.
Estate planning varies substantially between individuals and is influenced greatly by a person’s goals. Each individual also has a unique situation as well as a background to consider. Two individuals with similar kinds of assets are worried about protecting property from future elderly care centers that might sound like they have similar estate plans. If one person is a disabled veteran, while the other has no military service though, estate planning between the two can be substantially different. When it comes to estate planning, countless important estate planning issues should be considered.
# 1 – Decide On Your Estate Planning Goals
Each person should assess his or her goals when deciding on what he or she would like to achieve with an estate plan. If the main goal is to make sure that a spouse inherits assets and can make choices after the individual becomes incapacitated, a plan involving a last will and testament and powers of attorney might be all that is required. If the primary objective of an estate plan is to guard against future liabilities, trust planning might be critical.
When Stephen Sondheim recently passed away, he passed on all rights associated with his theatrical work including several well-known musicals including several unfinished pieces to a trust, which will be tasked with managing his estate.
The Sondheim trust now will assess the future of the well-known artist’s intellectual works in addition to any other assets he owned at the time that he passed away. The arrangements regarding what will happen to Sondheim’s assets are contained in a petition that was recently signed and then filed with New York Surrogate Court.
A petition for probate reports that the approximate worth of Sondheim’s assets when he passed away was greater than $500,00 and less than $75 million. Several estate planning attorneys, however, suggested exercising caution in reading these numbers, which are simply a rough estimate and do not depict the worth of whatever Sondheim positioned in a trust while he was alive.
Even if you’ve already abandoned your New Years’ resolution, you should still do your best this year to focus on your loved ones and what’s best for your future. One of the best things that any of us can do during times of uneasy political or economic times is to focus on what’s important. Your planning for what lies ahead should understandably address critical issues like what happens if you become incapacitated or unexpectedly pass away. This article reviews some of the basic frameworks that you should start (or revise) your estate plans in 2022.
Critical Questions to Ask About the Status of Your Estate Plans
Some of the important issues that you should ask about the status of your estate as you decide the strength of your estate plan include:
You might have considered utilizing a living trust. Often, these trusts are a good idea if a person wants to maintain assets for loved ones without subjecting assets to significant taxes or probate.
In reality, however, people often forget a whole range of other types of trusts including revocable and irrevocable living trusts. The type of trust you utilize can make a big difference in the outcome of your estate. Pick the right type of trust and you can really simplify the estate planning process. Pick the wrong trust and you can end up facing a range of complications.
Revocable means revisable, while irrevocable means a person cannot later changes a trust’s terms barring a few exceptions. A revocable trust lets the trust creator modify the trust at some later date. With irrevocable trusts, a person lacks the ability to modify the terms of the trust.
The 1988 film Rain Man was directed by Barry Levinson and is cited by many people as a favorite film. Rain Man tells the story of Charles Babbitt (Tom Cruise) who finds out that his estranged father has passed away and left all of his large estate and its associated assets to the other son, Raymond (Dustin Hoffman), who is an autistic savant. Only after the father passes away does Charles Babbitt learn of Raymond’s existence. Rain Man shines some interesting issues in regards to estate planning and many people have questions about how the movie would play out in real life.
In the real world, Sanford Babbit would likely meet with his estate planning attorney before his death. Sanford would likely inform his lawyer that he has two children at this point. Sanford would also likely tell the lawyer that he had placed his autistic son in a private care facility for individuals with intellectual disabilities. Sanford would also likely express a legitimate concern about Raymond and his desire to make sure that his son can always live at this facility and remain protected.
A knowledgeable attorney would likely recommend that Sanford establish a revocable trust. Following Sanford’s death, the trust would continue for the benefit of Raymond, while also potentially making annual distributions to Charlie. Following Raymond’s death, the trust would then be distributed to Charlie. Sanford would also likely execute a no-content clause stating that if Charlie seeks to argue or place aside the trust or Sanford’s will or disrupt Raymond’s situation, annual distributions to Charlie would be discontinued and the trust is passed from Charlie to the facility when Raymond passes away.
New York Estate Planning & Elder Law Blog