A Florida woman whose husband died about 16 months ago has been struggling ever since to try to get money out of the Wells Fargo savings account that her husband had in his name. Julia Bolena has had little luck in gaining access to the funds because of a number of problems.

Before her husband had died, the couple had apparently created a living trust and transferred some of their property to it so as to eliminate the necessity of having to go through probate. Unfortunately, it appears that Mr. Bolena never transferred the savings account he had with Wells Fargo Bank to the trust.

Though the couple had a checking account with Wells Fargo that was in both of their names, the savings account was only Mr. Bolena’s name. Because Mr. Bolena did not list his wife as a joint account holder, nor did he transfer the account to the trust, Mrs. Bolena has been unable to access the money.

To make matters worse, when Mrs. Bolena contacted a Florida probate clerk to ask what she could do to access the funds, the clerk told her that it would cost her $250 for the clerk’s office to issue her a letter that would direct Wells Fargo Bank to allow her access. The account in question only has a little over $270 in its, making acquiring the letter nearly pointless. To add insult to injury, Wells Fargo is charging a small fee to the account funds every month, further depleting them.

Raymond J. German, LTD. is a member of the American Academy of Estate Planning Attorneys.

Any time you consider creating a trust, you will have to make some important decisions. In addition to selecting the property to transfer to the trust, as well as deciding who the beneficiaries will be, you will have to select a trustee to manage the trust property.

In some trusts, such as a revocable living trust, selecting the trustee is easy, as you typically select either yourself or another family member. In other trusts, such as a testamentary trust, you may have to choose someone else to serve as trustee. You should consult with your attorney about your options when choosing a trustee, but here are a couple of tips that may help you.

Family Members

With a testamentary trust the property you transfer to that trust is typically used to benefit certain family members, such as grandchildren, adult children, or others. You may, in this situation, want to choose a family member to act as trustee over the trust. While this allows you to minimize management costs, it may not be a good idea if there is family conflict present.

Organizational Trustees

Trust companies, a bank’s trust department, and other organizational trustees who have experience managing trusts are another option you might consider. While the fees for these organizational trustees are sometimes significant, they could be a good choice if you want to prevent family conflicts. Also, if the trust will last for generations or longer, the organizational trust can easily handle managing the trust over a long period of time.

Raymond J. German, LTD. is a member of the American Academy of Estate Planning Attorneys.

What is a Testamentary Trust?

The testamentary trust is a type of trust that arises out of your last will and testament – thus, the reason for the name – and it doesn’t take effect until you die.

What is the Purpose of a Testamentary Trust?

Usually, a testamentary trust is created with the purpose of benefiting a minor child. Since a minor child cannot receive major gifts, such as a house or the bulk of an estate, the testamentary trust allows the decedent to leave the property to a trustee who then looks after it for the benefit of child.

How are the Terms of a Testamentary Trust Changed?

If you want to change the terms in your Will, you can’t just scratch out the undesirable terms and replace them with the new ones; there are procedures that must be followed, and formalities that must be observed. Since a testamentary trust is written into your will, the same procedures and formalities must be observed in order to change one of its terms. If these procedures and formalities are not observed then the will may not be admitted to probate, which means that the testamentary trust will fail.

What are the Basic Formalities Required?

The basic formalities required for creating a validly attested will and, therefore, a testamentary trust are threefold. First, the will must be in writing. Second, the will must be signed by the settlor/testator. Third, this must be attested to by witnesses.

If you have further questions, contact your local estate planning attorney.

Raymond J. German, LTD. is a member of the American Academy of Estate Planning Attorneys.

Trusts are in incredibly useful estate planning tool that almost anyone can use to their benefit. While some trusts are designed for very specific situations, others can be used for a broad variety of purposes. Because there are so many options available, you will always want to confer with your attorney when choosing the type of trust that is right for you. However, there are several common trust types which many people can use regardless of your situation.

Revocable Living Trust

When you create a trust you determine several key elements. One of these is choosing whether or not you can change the trust or if the trust terms should be permanent. A trust in which you can change is known as a revocable trust because you, the person making the trust, has the right to change the trust terms. These are also known as a living trusts because you create the trust while you are alive instead of doing so through your will. Revocable living trusts offer a wide range of benefits, such as helping to delay probate, allowing for an easy succession of trustees, and protecting both yourself and the beneficiaries in case you someone is incapacitated.

Testamentary Trust

Unlike a living trust, a testamentary trust does not come into existence until you die and the terms of your will become effective. While you can change the terms of a testamentary trust as long as you are alive and have mental capacity, the terms become irrevocable once you die. These trusts are great if you want to preserve assets for your children, provide for a child or adult with disabilities, or you want to give to charities.

Raymond J. German, LTD. is a member of the American Academy of Estate Planning Attorneys.

Question 1: What is decanting?

Decanting is the process of transferring property from one trust to another. Specifically, the term applies when a trustee transfers property from one irrevocable trust to a new trust that has terms different than the original.

Question 2: Why is decanting useful?

The terms of an irrevocable trust are typically not subject to change. With decanting, a trustee has the ability to effectively change the terms even though he or she is doing so by transferring the property to a new trust that has new terms. In states that allow for decanting, this is one method a trustee can use to more effectively manage the trust without having to go before court to seek judicial permission to take certain actions. In states that don’t have decanting provisions, the trustee will probably have to get court permission to perform the decanting.

Question 3: When is decanting used?

There are wide range of situations in which a trustee can use decanting. Some common situations include: taking advantage of new laws, improve outdated trust provisions, address the new needs of the beneficiaries, or transfer the jurisdiction of the trust to a new state that has more favorable laws and tax provisions. In general, the trustee can only use decanting for the benefit of the trust beneficiaries.

Raymond J. German, LTD. is a member of the American Academy of Estate Planning Attorneys.

The 2011 Academy Award winning film, The Descendants, tells the story of Max King, played by George Clooney, and his family after his wife is left in a coma following a boating accident. Though the relationship between Mr. King, his daughters, his wife, and his family takes a the bulk of the movie’s plot, there are several estate planning issues in the film that may be of interest to you if you are considering beginning your own planning efforts.

• Inherited wealth problems. As the descendants of a Hawaiian princess and a white Hawaiian banker, Mr. King and his relatives have inherited a substantial interest in a large piece of untouched Hawaiian land. However, Mr. King is very set on ensuring that neither he nor his daughters are spoiled by this wealth. He goes so far as to bring his own lunch to work everyday, and points out that he only spends what he earns through his income as an attorney. For many people with an estate plan, ensuring that their children are not spoiled by the sudden influx of wealth is a serious concern.

• Individual medical choices. Though her accident left her in a coma, Mr. King’s wife left behind a living will, also known as an advance medical directive. Though each state has its own laws governing living wills, they all essentially allow you to make your own medical decisions and put them in writing in case you’re ever left unable to speak for yourself. In the movie, Mrs. King’s advance directive dictated that in her medical condition she does not want to receive life sustaining artificial nutrition, and orderd her doctor and family members to let her expire.

Raymond J. German, LTD. is a member of the American Academy of Estate Planning Attorneys.

If you’ve ever done estate planning, you deserve a pat on the back.  It may surprise you to know that about half of the people in the United States, don’t have an estate plan.  It’s shocking, really, because all adults need their own estate plan.  So,  you’re off to a great start; but, there are 7 things you may have forgotten since you did your estate planning.

Have you forgotten that you need to update your estate plan everyone to three years?  Yes, your needs, the law, and your attorney all change so your estate plan needs to change as well.

• And, remember that if you go through a divorce, get married, have a baby, adopt a child, start a business, or move to a new state, you need to update then as well.

• Oh, and have you remembered to fund your revocable living trust and title newly acquired assets in the name of your trust as well?  You need to do this so that your estate plan works, meaning it does what you want it to do.

• Have you remembered to chat with your loved ones about your estate plan, introduce them to your estate planning attorney, and show them where you keep your estate planning documents and other important papers?

• Have you thought to update your list of assets and jot down up to date account number with usernames and passwords?  Include your PINs too.

• Perhaps, most importantly, please remember to write “I Love You” letters to your loved ones.  This is truly the best inheritance of all.

• Did you think to ask your trusted helpers’ permission when naming them in your estate planning documents?  Trusted helpers are your primary and contingent executor, trustees, guardians for minor children, and agents under powers of attorney.

Raymond J. German, LTD. is a member of the American Academy of Estate Planning Attorneys.

When creating your estate plan, you may consider creating a revocable living trust.  Many people choose to include this tool in their estate plan because of its many benefits.  We’ve outlined answers to some of the most common questions regarding the use of revocable living trusts.  If you have any additional questions, or if you’d like to create a revocable living trust, consult with a qualified estate planning attorney.

What are the benefits to creating a revocable living trust?

A revocable living trust is a trust that can be changed at any time.  This means that if you change your mind, you won’t have to worry that your trust no longer meets your needs.  Another major benefit of a revocable living trust is the fact that you’re able to avoid the probate process.  This is because the assets held in your trust are not subject to probate.  This can help to save money, will keep your affairs private, and will allow your beneficiaries to receive their inheritances much sooner.  A revocable living trust is also beneficial because you’re able to give someone authority to handle your trust’s affairs in the event you become incapacitated.  In addition, most people like that they can pass their loved ones’ inheritances in asset protection trust shares.
Are there disadvantages to creating a revocable living trust?

No! There are no disadvantages to this estate planning tool, there is a greater investment in time and resources than only a will;  however the benefits are worth the investment. It is important to work along side your qualified estate planning attorney to be sure that you place all of your assets in the trust.

If you have any additional questions or if you’d like to create a revocable living trust, consult with a qualified estate planning attorney.

Raymond J. German, LTD. is a member of the American Academy of Estate Planning Attorneys.

If you are planning your estate, you may be considering creating a revocable living trust.  This type of trust offers many benefits.  We commonly receive questions regarding the use of a revocable living trust.  We’ve taken the time to outline answers to some of the most common questions.  If you have any additional questions or if you’d like to create a revocable living trust, meet with a qualified estate planning attorney.

What is a revocable living trust?

A revocable living trust is a legal agreement that holds the title to your assets.  You place assets in your trust by titling them in the name of the trust.  Your trust’s instructions are used to determine how your assets will be distributed after your death.  You’re able to have control over your trust during your lifetime and can plan for the management of your trust’s assets during any period of disability and after your death.

Do I lose control of my trust’s assets during my lifetime?

No!  As the trustee of the trust, you’re in full control of your trust and its assets.  You’re able to make changes as you see fit and are able to do as you wish, meaning that you can control your own investments and take assets out or put assets into your trust any that time you are alive and well.

Who will manage my revocable living trust after my death?
You will appoint a successor trustee who will be responsible for managing your affairs after your death.  This includes managing and distributing assets based on the trust’s instructions and handling all financial and tax requirements.  You should choose someone who is responsible, trustworthy, and able to handle all of the duties associated with the job.  Your trustee should also be willing and able to communicate with your trust’s beneficiaries and professional advisors on a regular basis.

Take a look at our next blog post (part 2 of 2) for more information on the use of a revocable living trust.  If you are ready to create a revocable living trust, consult with a qualified estate planning attorney.

Raymond J. German, LTD. is a member of the American Academy of Estate Planning Attorneys.