Planning For Your Children
Having a Will Alone Simply Does Not Ensure the Care of Your Kids If the Unthinkable Happens to You!
If you are a parent of minor children who are counting on you, your estate plan must begin with ensuring your children would always be taken care of by the people you want, in the way you want, no matter what happens.
One of our areas of greatest expertise is in planning for the well-being and care of the children you love – all the way from newborn to age of majority, and all the way through adulthood if your child has a special need.
Without Proper Planning, Here's What Could Happen
Your children could be placed into the care of strangers while the authorities figure out what to do (yes, even if you have a will in place and even if you have a living trust). It’s true that this would likely only be temporary, but trust us: you never want your children in the arms of strangers, not even for a minute.
Your children could be put into the custody and care of someone you would never want, like that one family member who has good intentions but who you would never want raising your kids.
A judge who doesn’t know you or your family will decide who will raise your kids, even if it is the last person you would ever want.
Your family could get into a long drawn-out custody fight or there could be a challenge to the guardians you have designated.
Up to 5% of the value of your assets could be lost to court costs and other unnecessary fees through the probate process, a court process that can tie up your assets for years and deprive your kids of the resources they need to live comfortably.
When your kids turn age 18, they get a check for whatever assets are left, no matter how immature they might be or what financial lessons they have not had a chance to learn yet.
Unscrupulous people out there find out when 18-year olds are getting that inheritance check by searching the public court records.
Unfortunately, the vast majority of estate planning attorneys do not address these issues and do not plan from a parent's perspective.
Yes, these things scare us too.
That’s why we offer a Kids Protection Plan® with every estate plan we do for families with young children.
What is a Kids Protection Plan?
Your Kids Protection Plan is a set of instructions, legal documents and an emergency wallet card – all of which you need to have if you have kids at home who count on you for their well-being and care.
If you are in an accident, your Kids Protection Plan® will make sure your children are never taken into the custody of Child Protective Services, strangers or the care of anyone you would not want simply because the authorities don't have clear instructions from you.
And your Kids Protection Plan® will ensure your children are raised by people you choose, not someone chosen by a judge who doesn’t know you.
Get started with your Kids Protection Plan® today!
6 Mistakes When Naming Guardians
Planning For Everyone You Love And Everything You Have
Do You Really Know?
Do you know beyond a shadow of a doubt what would happen legally and financially to you, your loved ones, your money and everything else you care about if something unexpected happened to you?
If you have an estate plan and it is out of date, your assets could be lost to the state department of unclaimed property or to an unnecessary and public court process.
If you do not have an estate plan, then your state has a plan for you, and it's probably not what you want.
Here’s the bottom line: If you do not know exactly what would happen to everyone you love and everything you own, then the first step is to find out exactly what would happen legally and financially so that you can decide if the current state of your affairs is okay with you.
How Do We Help You With Estate Planning?
We meet together for your Family Wealth Planning Session where the sole purpose is to get you more informed.
Before your Family Wealth Planning Session, you will complete your Family Wealth Inventory & Assessment, which will help you to get clear about what you own and what you have to think about when it comes to planning for the well-being and care of your loved ones and your belongings.
If you decide the current state of affairs is unacceptable, and if we both decide that it is a fit to work together, then we will design an estate plan together that will best suit the needs of your family.
The foundation of your estate plan will often include a revocable living trust, which, when done correctly and maintained over time, should help your family avoid the cost and delay of the public probate process and minimize or eliminate estate taxes.
For people with additional needs, we provide advanced estate planning services.
“Can I DIY My Estate Plan?”
We get this question all the time.
Unfortunately, most DIY plans do not work because much of what passes for estate “planning” is little more than word processing.
You answer a few automated questions and then the drafter (normally just software, not a human being) decides which “plan” is right for you. And then you are forced into a template document that may not reflect your needs or situation whatsoever.
This is not estate planning; this is little more than a “search and replace” of your family’s name and then the hit of the “print” button.
We Are Professional Estate Planners
The Family Protection Lawyers® at Cornerstone Law Services will educate you and take the time to get to know you, your family, your concerns, your goals and your issues.
The Family Protection Lawyers® at Cornerstone Law Services will gladly and patiently answer all your questions to design an estate plan that is exactly right for you and will keep your loved ones out of court and out of conflict.
Special Needs Planning
Navigating The Complexities Of Special Needs To Protect Your Loved One
How To Leave Assets For Your Special Needs Child
Estate planning for a family with special needs children comes with a complex set of financial, social, and medical issues that some lawyers are ill-equipped to handle.
We at Cornerstone Estate Planning are dedicated to ensuring your child with special needs will be well taken care of when you are no longer able to serve as their primary caregiver.
We offer a variety of estate planning tools and strategies designed to accommodate the unique circumstances presented by children with special needs and their families.
We can help you pass on the financial assets needed for your child to live a rich quality of life without jeopardizing their eligibility for government benefits. We will also assist you in finding and appointing a trusted guardian and/or trustee to look after them in the event of your death or incapacity. And we will help with locating the best residential opportunities and identifying the best means to pay for them.
Special Needs Trusts
One “Catch-22” situation that typically arises in estate planning for those with special needs is how to leave enough money to pay for the massive amount of care and support a special needs loved one typically needs throughout their lifetime, while not disqualifying them from government benefits like Medicaid and Supplemental Social Security Income.
If you leave a large lump sum of money directly to a special needs child, immediately there are concerns about how that might impact governmental assistance and whether your child is capable of managing finances on their own.
Fortunately, we have an estate planning tool called a “special needs trust” designed to provide supplemental financial resources for the physically, mentally, or developmentally disabled child without affecting their eligibility for public healthcare and income assistance benefits.
This said, the rules for such trusts are quite complicated.
For instance, funds from a special needs trust cannot be distributed directly to the disabled beneficiary and must be disbursed to a third party who is responsible for providing the goods and services your special needs child will need to maintain a comfortable lifestyle.
Even once you have established a special needs trust, the care and attention we pay to your special needs child is not over. We know that your child’s financial and emotional requirements will over time, sometimes dramatically. And the laws governing public benefits change over time.
Given this, it is vital to work with an experienced special needs attorney who can create a comprehensive special needs trust that is both properly structured and appropriate for your child’s specific situation.
Special Needs Planning And Trusts
If you need estate planning for your child with Down Syndrome, autism, cerebral palsy, or any another developmental or intellectual disability, we are here to help you.
We will help you develop a sustainable living plan for your child with special needs that will provide them with the finances they need to live a full life, while preserving their access to government benefits.
Asset Protection Planning
Protect Your Dream
Nobody Expects To Be Sued
Just ask the 20 million people involved in lawsuits last year.
Divorce, inheritance, health issues, creditors, employee disputes, theft, changing markets, malpractice suits, sexual harassment claims, natural disasters and disgruntled business partners – these are just a few issues that can result in devastating lawsuits for unprepared business owners.
The highest level of risk falls on those who think they are immune.
Americans are now more concerned than ever about protecting their assets from creditor claims, taxes, divorce and other disasters. And rightly so.
The more success you have, especially in business, professional practice or real estate activities, the more at risk you are as others see your success grow.
Here are some of the risky behaviors you may be engaging in right now without even realizing it:
Will you be signing loan documents, a personal guaranty or a lease in the near future?
Do you have rental properties or employees?
Are you an attorney or physician?
Do you work in construction or perform professional services?
Are you getting married soon?
Are you or will you be getting married and you have children from a prior marriage or separate property assets?
Here’s the thing: All of these activities are activities we want to see you do more of!
But we do not want you to create a negative impact on your life or your future.
How You Can Take Maximum Risk With Minimum Worry
This is where we come in. We set up your estate planning in proper ways to ensure that you can take maximum risk with minimum worry.
We assist our clients in determining the appropriate level of asset protection planning for their particular circumstances. We will consider insurance, prenuptial agreements, asset segregation, choice of jurisdiction, gifting, LLCs, partnerships, corporations, and asset protection trusts.
There are many different strategies to accomplish the protection of your assets both while you are alive and for your family after you are gone.
To find out which strategies may be right for you, schedule your Family Wealth Planning Session and we will talk about it one-on-one.
Estate Tax Protection and Planning
Excessive Taxation Is Not A Foregone Conclusion
Uncle Sam’s Cut
You work your entire life to save and have enough money to comfortably retire – and ideally leave something for your loved ones when you pass away.
During your life you pay all kinds of taxes: income taxes, property taxes, sales taxes, and so on. And at the end, the government still wants to tax you on the assets you have left at your death.
This is known as the estate tax, sometimes called the “inheritance tax” or “death tax.”
The best way to protect your assets and your family’s future from excessive taxation is to hire an attorney who specializes in estate tax planning. We can help you reduce – if not entirely avoid – the federal estate tax burden.
How Does the Estate Tax Work?
Estate tax is totally separate from federal income tax, property tax, sales tax, and every other type of tax you’ve paid during your lifetime.
Estate tax is a tax paid on the net value of all your assets owned at your death.
However, there are fairly sizable exemptions to the estate tax so it is primarily a high net-worth individual or family who is affected.
This said, the estate tax rate is a whopping 40% on your net estate, so if you do have an estate tax problem, we are talking about potentially massive sums of money your estate will owe to the government before a single heir would enjoy a single penny.
Is The Estate Tax Really Your Problem?
President Trump’s Tax Cuts and Jobs Act of 2017 nearly doubled the allowable exemptions to the estate tax that existed prior to 2017. This ensured that even fewer families would be affected.
The estate tax exemption for individuals increased from $5.4 million to $11.2 million, and the estate tax exemption for married couples increased from $10.9 million to $22.4 million.
Unless your estate is valued at more than $11.2 million, you do not have to worry about the estate tax at this time.
But for those who are affected, there are numerous estate planning strategies available that can greatly reduce the amount owed. We can advise you on the best options for your family.
Advanced Estate Planning Strategies
Families with high-value estates face several complex legal and tax issues – estate tax is only one of them.
We offer a number of advanced estate planning strategies that are aimed primarily at reducing a family’s tax burden. In addition to minimizing or eliminating the estate tax liability, we also help you leverage the advantages of gift tax and generation-skipping tax to pass assets on for successive generations without risk of a tax liability decimating your estate at each generation.
Some of our most popular advanced estate planning tools and strategies include:
Life insurance trusts
Qualified personal residence trusts
Grantor retained annuity trusts
Asset protection trusts
Family limited partnerships or limited liability companies
Protecting Your Estate During Your Life And After You Are Gone
You have worked hard to build you family’s wealth and legacy, so it makes sense to put similar effort into protecting those assets after you are gone.
This includes protecting your assets against excessive taxes.
At your Family Wealth Planning Session, we can go into detail about how you can minimize the potential tax burden faced by your family so that you can maximize the inheritance you pass on to your loved ones.
Long-Term Care Planning is another aspect of estate planning, focusing primarily on the needs of families and individuals as they age. Issues of aging include senior housing and home care, long-term (or nursing home) care, guardianships and health care documents, Medicare and Medicaid.
Long-Term Care Planning
In order to develop a long-term care plan that will actually work, it is vital that we work collaboratively with you, your family, and your advisors to design a long-term care strategy that addresses your specific situation. All of this strategy needs to be done before any preparation of the legal instruments necessary to carry out your long-term care objectives.
The attorneys at Cornerstone Law Services can help you and your family create a plan that may prevent the loss of life savings to long-term care expenses. Often these plans involve the use of trusts, expansive powers of attorney for financial and health care decisions, and other important legal documents.
Our Long-Term Care Planning Process
At Cornerstone Law Services, we have a process that ensures your long-term care planning objectives are met. We begin with a careful review and analysis of your current situation, and then recommend strategies that can meet your long-term care goals.
Long-term care planning services we often provide include:
Legal planning for long-term care
Comprehensive estate planning
Special needs trusts for loved ones with a disability
Disability planning documents
Counsel regarding guardianships
Three ways to pay for Long-Term Care
Long-Term Care Insurance. If your family member is fortunate enough to have this type of coverage, it may go a long way towards paying the cost of a home health aid, assisted living facility or nursing home. Unfortunately, most people do not have this type of insurance or the coverage is inadequate.
Self Pay. Many people are forced to pay for the cost of long-term care out of their own pocket. At the rate of $3,500 to $7,000 per month, savings can be depleted quickly.
Medicaid. Medicaid is the largest payer of long-term care services. Medicaid is a federally and state funded needs-based benefit that will provide for various types of long-term care. The rules for coverage and eligibility change frequently. Upon qualification, Medicaid will pay for long-term care in a nursing home and Medicaid-approved prescription medications. Medicaid may also pay for long-term care for Alzheimer’s and Parkinson’s patients.
Can you structure your assets so that you qualify for Medicaid?
Unfortunately, the overwhelming majority of nursing home residents enter a facility on a private basis and only later turn to the Medicaid program for coverage. Many spend themselves into poverty event though, through appropriate planning, they could have qualified for Medicaid sooner and preserved their assets for their family.
In order to be eligible for Medicaid payment of nursing home bills, the recipient must be a U.S. Citizen or legal U.S. resident alien, meet specific income and resource limits and need nursing home placement and custodial care.
Many people think they will not qualify for Medicaid because they have too many assets or too much income. While the Medicaid rules are complicated, a simple rule is that a person owning over $2,000 of countable assets will not qualify. But don’t make a hasty judgment before learning all the facts! By restructuring your assets and diverting your income to special types of trusts, you may qualify now, or much sooner than you expect. With the help of an experienced attorney, you may be able to transform your assets so that you or a family member may qualify for Medicaid before your need for long-term care arises.
The importance of planning early
Many of the planning strategies that are available for asset protection in long-term care planning work only if the plan has been in place for at least five years. For those who are at the nursing home doorstep, it is not too late to plan at all, but it may be too late to implement all the savings strategies.
No one likes to think about the possibility of their own disability or the disability of a loved one. However, statistics show that everyone should plan for at least a temporary disability. By planning ahead for disability, you will have the comfort of knowing that, if the day comes for you or a loved one, you will be prepared.
Adult Guardianship And Conservatorship
Protecting You In Times Of Illness And Injury
When Guardians And Conservators Are Needed
Whether through illness, injury, or mental decline, anyone can require a guardian or conservator to care for them if they become mentally or physically incapacitated.
Children automatically qualify is not having the “capacity” to be in charge of their own financial affairs and decisions about their well-being.
And an adult may qualify as not having “capacity” if you become seriously ill or injured.
Unless you have the proper estate planning in place that names the individual who will be your guardian or conservator in case of illness or injury, a probate judge will be deciding who is your guardian or conservator.
At Cornerstone Estate Planning we can guide you through the often complex and emotional process of the probate court appointing a conservator or guardian for you or for your loved ones.
Obtaining Adult Guardianship Or Conservatorship
Seeking appointment of a guardian or conservator for an adult is a serious undertaking.
The law presumes that a person over age 18 can act for themselves unless shown otherwise. As a result, the probate court typically requires extensive proof that a guardian or conservator of an adult is warranted.
The process begins with the interested party filing a petition in court that requests the court declare the adult essentially “incapacitated,” at least from the legal perspective.
Sometimes, these proceedings are initially “ex parte” (in secret) so that a guardian or conservator may be appointed before other interested parties are aware, if there is a concern about other interested parties’ intentions or even the anticipated behavior of the adult at issue.
Many times, guardianship and conservatorship filings can lead to heated disputes between family members or close family friends who may claim they are better suited for the role.
Regardless of who files the petition, guardianship and conservatorship will only be granted if the court determines there is enough evidence to show the person is legally “incapacitated” to the point where they can no longer make legal, financial, or healthcare decisions for themselves.
Who Is Eligible To Serve As An Adult Guardian Or Conservator?
Although courts typically give preference to a spouse or another close family member, a guardian or conservator does not have to be a relative.
Provided the person seeking appointment is a competent adult, close friend, or any other interested party, they are eligible to serve as long as the judge determines they are best suited for the role.
If a relative or friend is not willing or capable of serving, the court will appoint a third party to serve as guardian or conservator.
Sadly, this can lead to horrible financial and/or physical abuse of the incapacitated so it is best to plan ahead and name a guardian and conservator in your estate planning documents to keep the courts out of the picture entirely.
Guardian And Conservator Responsibilities
Depending on the extent of the person’s incapacity, a court-appointed guardian or conservator can be given near complete control over your life.
There are two areas of decision-making where a guardian or conservator has authority: decisions about your well-being and decisions about your finances.
Decisions about well-being include determining your place of residence, your attending physicians, and your medical treatment.
Decisions about your finances include how your home is paid for, what your income is used for, whether to pursue legal actions on your behalf, how to manage your assets, filing your insurance claims, and many other matters.
Usually one person is appointed for both roles, but the court can also split the responsibilities among multiple parties.
For instance, one person may oversee the financial decisions, while another person handles living arrangements and healthcare.
Moreover, the court often requires the guardian and conservator to file detailed status reports such as financial accountings at regular intervals or whenever important decisions are made, such as when an asset is sold or when you require a substantial expense for your care.
Some of the most common duties of adult guardians and conservators include:
Paying your bills
Determining where you live
Monitoring your residence and living conditions
Providing consent for your medical treatments
Deciding how your finances are handled, including how your assets are invested and if any assets should be liquidated
Managing your real estate and other property
Keeping detailed records of all expenditures and other financial transactions
Making your end-of-life and other palliative care decisions
With the huge responsibility and loss of control that comes with guardianship and conservatorship, the process can often feel overwhelming.
The best course of action is to do your estate planning ahead of time to name exactly who is your preferred guardian and conservator so that your family will not have to deal with a courtroom or lawyers in the first place.
Unfortunately, some of our clients did not do estate planning soon enough, and we were called upon to help their family members with establishing guardianship or conservatorship.
If you are in this situation trying to help a loved one, we can help.
Helping You During A Time Of Loss
If you are here to learn about the probate process after the passing of a loved one, we first want to say that we are very sorry for your loss.
We hope that the information you find on this page will simplify any legal and administrative headaches you might otherwise face during such a difficult time.
Overview Of The Probate Process
Probate is a process through the court system to ensure the legal transfer of assets from the deceased’s name to the names of the deceased’s legal heirs or beneficiaries.
Probate is generally also necessary to prove the validity of a will, appoint someone to manage the estate, inventory and appraise estate property, pay the deceased’s debts and taxes, and distribute the estate property as directed by the will (or by state law if there is no will).
What Is So Bad About Probate, And What Should I Do Next?
You might read online that probate is ‘bad news’ and that it tends to be very expensive and time-consuming.
It depends, but one thing is for sure: The probate process is a public process that can be avoided with proper planning in advance.
But if you are now in a situation where you must go through the probate process to administer the estate of a loved one, the best thing you can do is get educated and get help to complete the process as quickly and with as little expense as possible.
How Does Probate Begin?
State law designates who is entitled to begin the probate process.
The person with highest priority is the person who is named in the deceased’s last will as the “executor” or “personal representative.”
If there is no will, then the law generally establishes a hierarchy of who is eligible in what order, normally starting with a surviving spouse, then surviving adult children, and so on.
The individual who has priority would start the probate process by having an attorney prepare the legal documentation to initiate probate and by filing the original will with the probate court.
Depending on the circumstances of the estate and the family, sometimes probate can be opened without advance notice to interested parties; other times, advance notice to interested parties is required before probate is officially opened.
The best way to determine exactly what probate process applies to the estate is to meet with Cornerstone Law Services so we can review your particular circumstances and give you the best possible guidance.
How is the Executor Chosen?
If the deceased person left a last will that is recognized as valid by the probate court, then the person named in the will as the executor or personal representative typically will be appointed, barring extraneous issues such as that person’s illness or old age.
If the person named in the last will is unable or unwilling to serve as executor, or if there is no will at all, then the probate court may appoint an adult family member, trusted friend, or professional third party.
How Does The Executor Get Paid?
State law provides that executors may be paid reasonable compensation for the time spent in administering the estate. This said, some executors, particularly if they are the surviving spouse or family members of the deceased, decline to be paid.
Could I Be Held Personally Liable For Making A Mistake As An Executor?
Being an executor is a big responsibility.
The probate code contains pages upon pages of complex legal rules and procedures that an executor must follow during the probate process. In addition, there are certain deadlines that an executor must meet in filing papers with the court and providing notice to interested parties.
If an executor does not comply with any of these rules, he or she can be held personally liable for any losses to the estate.
My Loved One Had A Trust… Will We Need To Go Through Probate?
In most cases if your loved one left a trust as the cornerstone of their estate plan, then no you do not need to go through probate.
However, there is one big caveat here: The deceased must have ensured that all of his or her assets were properly titled in the name of the trust or properly named the trust as beneficiary in order to completely avoid probate.
Unfortunately, not all estate planning attorneys who draft a trust for their clients ensure that assets are properly owned and beneficiaries are properly designated.
Time and again we have helped family members of a recently passed loved one who found out title and beneficiary designations were not proper, and then they face the frustration, expense and delay of a probate proceeding even though the person they loved had a trust.
You may be asking: Why is that?
Oftentimes, a trust was prepared many years ago and was never updated. Assets changed, the law changed, but the trust only got more out of date. That is why it is so very important that you carefully choose your estate planning attorney who will meet with you for regular reviews of your estate plan and your assets so that the planning you do now works as planned later.
This is why we do things so much differently than most other lawyers and law firms here at Cornerstone Law Services.
What Assets are Subject to Probate?
As a general rule, assets owned solely in the name of the deceased person are subject to probate.
By contrast, assets with title designated as “joint tenants with right of survivorship” are not subject to probate and pass by operation of law to the surviving joint owner. Also, assets with a “transfer on death” or “pay on death” designation, such as life insurance and retirement accounts, are not subject to probate and pass by operation of law to the designated person.
In some situations, however, assets that would otherwise pass by title or beneficiary designation to a specified person can be subject to the probate process. Please call us if you have questions about your specific situation.
How Are Probate Assets Distributed If There Is No Will?
When there is no will or trust to dictate who receives what, then probate assets will be distributed according to state law.
In other words, the state legislature has made their best guess as to who you would want to receive your assets.
The typical hierarchy is that all probate assets go to your surviving spouse; or if you do not have a surviving spouse, then all probate assets are split equally among your children; and so on following the branches of your family tree.
Where it gets tricky is if your surviving spouse is not the parent of your surviving children; or if you have a surviving spouse, no children, and a living parent (some states dictate that your surviving spouse split your estate with your living parent in this scenario); or even if your surviving spouse has children who are not your children (some states have complicated formulas for who gets what in this case).
You can see how things can get complicated quickly when you rely on state law alone instead of doing your own planning upfront.
How Long Does Probate Take And How Much Does It Cost?
Probate proceedings typically take around 6-12 months if there are no snags whatsoever. Some probate cases linger for two or more years if beneficiaries are disputing or if the deceased left property in multiple states.
In terms of cost, every probate proceeding is different. Probate costs include court filing fees, attorney fees, appraisal fees, professional fees such as tax preparation, executor compensation, document certification fees, recording fees, and more. Some states allow fees to be determined as a percentage of the probate assets, and other states provide that fees are determined pursuant to a statutory schedule.
How To Choose The Right Attorney For Your Probate Case
The best way to ensure your probate proceeding is handled properly and quickly is to choose your attorney wisely.
Do not assume that all attorneys are the same.
Too many lawyers only “dabble” in probate or trusts. Do not choose a lawyer who does probate “on the side” – this exposes you to blunders throughout the process, causing problems for you that should have never come up and ultimately delaying the resolution of the probate proceeding.
Plus, please know you are not required to hire the attorney who drafted the will!
Just because a particular attorney drafted the will does not mean that attorney must handle the probate process, nor are they necessarily the right person for the job. You need to be comfortable with the attorney and confident that they are the right attorney for you.
Choosing your probate lawyer is one of the most important decisions you will make.
If you put in the time and effort to find the right lawyer, you will be rewarded with a compassionate advisor who will help you navigate the probate process with minimum headache and hassle.
“What Do I Do Now?”
If you are ready to get started with the probate process after the passing of a loved one, please contact us and we will help determine your next best steps.
We are here in service to making this all as easy as possible on you, and we look forward to relieving any administrative or legal burdens you may face during this time of loss.
Peace Of Mind For Trustees And Beneficiaries
Here For You
We understand how you feel if you are here because a loved one has passed away. Please know we express our condolences to you if that is why you are at this page.
Trying to handle the technical details during a time of loss can be a challenge. We are here to help.
We want to help you through this process and take as much off your hands when it comes to locating assets, paying bills and making sure your loved one’s assets get to the right people without court or conflict.
If your loved one created a trust prior to their passing and all of his or her assets are in trust or named the trust properly as the beneficiary, then the good news is that we can begin the estate administration process completely outside of probate court.
Who Do We Help?
We work closely with the deceased’s family members, beneficiaries, and trusted advisors to ensure the deceased’s trust assets are inventoried, debts are paid and the assets are distributed to the named trust beneficiaries.
Depending on the type of trust involved, the assets may be distributed outright to the named beneficiaries, or the assets might be held in trust for the future benefit of the named beneficiaries.
How Does Trust Administration Work?
Every trust has named a “trustee.” The trustee’s job is to ensure that trust assets are handled properly and the trust terms are complied with.
Serving as a trustee entails a huge level of responsibility and liability. We have seen many instances where the person named as trustee will have limited background or experience in carrying out the legal and financial duties that come with administering a trust.
That’s okay. As long as the trustee is aware the most careful course of action is to hire an attorney to help with trust administration, then the trustee can feel comfortable knowing the trust is being administered properly, all legal requirements are being satisfied and the trustee is minimizing or eliminating any personal liability related to the role of trustee to the extent possible.
During trust administration, we will evaluate title to and beneficiary designations of all of the deceased’s assets to identify which assets fall under trust administration and which assets might need to be probated. We will also coordinate appraisals of significant assets to get a clear picture of the deceased’s net worth for estate tax purposes.
What Are The Trustee’s Responsibilities?
Trustees are typically responsible for all of the following:
Notification to all heirs and beneficiaries of the pending trust administration
Identification and collection of assets
Determination of values of assets
Payment of all debts, expenses and taxes of the trust estate
Preparation of regular accountings during trust administration
Solicitation of professional advice as to the disposition of jointly held assets, life insurance, and retirement benefits that pass through or outside the trust
Preparation of federal and state tax returns, as well as gift tax and generation-skipping transfer tax reporting
Communication with beneficiaries throughout the trust administration process
What Happens When Trust Administration Is Complete?
Once the trust assets are ready for distribution, the trustee will refer to the trust terms as to how assets will be distributed to the named beneficiaries or held for the benefit of the named beneficiaries in the trust.
Sometimes the trust terms dictate that assets may be distributed outright to the named beneficiaries, and other times the trust terms dictate that the assets should be held in trust for the benefit of the named beneficiaries.
It is very common, for example, for trust assets to continue to be held in trust for named beneficiaries if the beneficiaries are minors or young adults, have special needs, or might have creditor issues that would unnecessarily expose their trust inheritance to risk.
If the trust assets are to be distributed outright to named beneficiaries, then the trustee will prepare and sign the appropriate conveyance documents to the named beneficiaries.
This part of the process admittedly can be complicated and time consuming.
Plus, the trustee will likely want some sort of assurance that upon transferring trust assets to the named beneficiaries that the trustee does not remain open to future claims of wrongdoing or omission. That is where attorney guidance comes in to help you cover gaps you may not even know exist if you are navigating trust administration on your own.
Giving The Trustee Peace Of Mind
We are here to help you in your role as trustee so that you have the peace of mind you are performing your trustee duties as law the requires and that you are not exposed to undue risk or liability.
We will help you administer the trust as quickly and smoothly as possible.
And most importantly, we will help you communicate with the trust beneficiaries in a way that makes them feel an integral part of the process, not simply a bystander or a “nuisance.”
You would be surprised at how many litigious situations we have seen arise simply from the failure to communicate with beneficiaries. That will not happen when we are guiding you in your duties as trustee.