The tools available to an estate planning attorney include wills, trusts, powers of attorney, advance directives, contracts, and deeds.
Things those attorneys address are present and future beneficial interests, covering contingencies, and managing tax uncertainty. All of these tools mentioned are designed to make it so legal problems, costs, family conflicts, and headaches are minimized, if not avoided altogether.
In the game of golf, the winner has the lowest score. In other words, they got through the course in the most efficient manner with the least amount of strokes.
As with golf, in the arena of estate planning, we are trying to avoid problems. In other words, the winner is the one who does not encounter legal problems.
Fortunately, it is not too difficult to be successful in this arena. Over the past 18 years of providing planning services for local clientele, I have learned that the people who follow advice are the ones who are successful.
Those who try to configure their own solution based on something they read on the internet, or what a friend told them, are the ones that are likely to experience unintended consequences.
For instance, let’s say Mom survives Dad and basically inherits everything from Dad free of trust. That transfer might not have been too involved because the assets may have all been owned jointly with survivorship rights, or designated to go to the survivor.
So, Mom might think that she should just put one child (let’s call him Jackson) on the house and the accounts and that child will “do the right thing” and make sure his siblings get their share.
Alas, this is an accident waiting to happen.
If Jackson is sued while Mom is alive, can Mom’s house and assets that she owns with Jackson be in jeopardy? Yes.
If Mom passes, and then Jackson gets divorced, can his wife get half of her assets? Yes.
If Mom passes and Jackson’s siblings plead with Jackson for their share, are they legally entitled to it? No.
There is a better way. Mom hires a lawyer and creates a trust, then she makes it so she and Jackson are co-trustees, and that Jackson can act alone while Mom is alive.
Mom wants Jackson to handle the bills so she makes him a co-trustee with the full authority to act. Mom’s trust directs Jackson to distribute the property to him and his siblings in equal shares and she leaves it to them in trust so they can use the money but can’t lose it if they get sued or divorced.
Now, under this better way, if Jackson is sued while Mom is alive, can Mom’s house and assets that she owns with Jackson be in jeopardy? No.
If Mom passes, and then Jackson gets divorced, can his wife get half? No.
If Mom passes and Jackson’s siblings plead with Jackson for their share, are they legally entitled to it? Yes.
What is the moral of the story? A little bit of planning can make a big difference.
Mark F. Winn, J.D., Master of Laws (LL.M.) in estate planning, is a local asset protection, estate and elder law planning attorney. mwinnesq.com