Living Trust

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               As an experienced estate planning lawyer St. Charles, I spend much of my time explaining to clients what estate planning is and how it works.  Estate planning is the use of legal documents to not only distribute your assets when you pass away, but to name people to make decisions for you if you become disabled and/or incapacitated.

Overview of Estate Planning Documents

Common estate planning documents include a living trust, last will and testament, medical power of attorney, healthcare directive and financial power of attorney.

A living trust can help you avoid probate and provide rules about when your beneficiaries receive their inheritance.  An example would be creating a provision where your beneficiary only receives their inheritance when they reach a certain age.  That age is up to you and depends on your specific situation.

As one of the top estate planning lawyer St. Charles, you can count on me to also review the purpose of having a last will and testament, which is another document which can distribute property when you pass away.  If you have a living trust, the will usually leaves the property to the trust, not directly to a beneficiary.

Power of attorney documents allow you to name a spouse to make financial and healthcare decisions for you if you become incapacitated.  An example would be naming your adult children to do banking for you if you had dementia.  A medical power of attorney could name the same adult child to work with doctors if the dementia advanced to a point where you were considered mentally incapacitated by a doctor.

Choosing the Right Estate Planning Lawyer

You should feel comfort with the skill level and personality of any lawyer you meet with.  Many attorneys practice in too many areas of law, which reduces their effectiveness in all areas of law that they practice.  Therefore, you should focus on choosing a lawyer that practices almost exclusively in this area.

Making estate planning decisions is intensely personal due to everyone having different family dynamics, levels of wealth and health and concerns about the ability of children to make smart decisions if they inherit your nest egg.  There are many different components to determining how your estate plan is created and it’s important that we discuss all of the aspects that help you identify these components.

An initial meeting to discuss your situation will include who should be in charge of distributing your inheritance, who your beneficiaries are and specifics about their personality and what assets you have.  Our focus is always on identifying client concerns and worries, client goals and educating clients on how the documents we are drafting resolve their concerns and accomplish their goals.  If you’re in need of an estate planning lawyer St. Charles, contact Legacy Law Center today.


Estate Planning For Children Struggling With Addiction

Estate Planning For Children Struggling With Addiction



 Many parents who have children struggling with addiction or mental illness are often too consumed with caring for those children in the present to given thoughts about who and how those children will be cared for when they are gone. 

It’s a question I ask just about all of my estate planning clients who have children…do your children now or have they struggled in the past with alcohol, drugs, gambling or mental illness?  I’ll remind those clients that there is no stigma about their children’s addiction in my office.  I’m there to help and frank discussion of this issue is unavoidable for proper estate planning. 

So how might estate planning differ in this situation?

We start with a couple of baseline rules.  First, we acknowledge that an addicted child may never recover.  Second, because the child may never recover, we must ensure that the child never has easy access to funds, even if non-addicted children do have easy access. 

A special purpose trust is often the answer.  They offer traditional estate planning goals such as avoiding probate, minimizing taxes and ensuring the intended beneficiaries are named, but also can be tailored for unique family situations involving addiction.  Parents can include language that allows the trustee to deal with both the good and bad, including incentivizing the child to meet certain goals or requirements to receive a distribution from the trust.  An example would be staying sober as evidenced by a drug test or staying on a certain medication that helps the child control their addiction.

In 2017, delaying distributions of principal, as I’ve discussed in prior articles, is not always a bad thing.  As with estate planning for children who are spendthrifts, not distributing assets means they will be invested with a competent financial advisor instead, meaning the money should grow.  If the addiction problem worsens, this provides more resources to fight the addiction.  If the addiction problem recedes, the trustee has more resources to support the child and to encourage their growth through education and career changes.    

Another consideration for proper planning should be to have the child execute a healthcare power of attorney and HIPAA release after they reach 18.  These documents could allow you to help a child in crisis.  Without these documents, you have no legal authority to speak with doctors and discuss medical records and decisions.  While these documents can of course be revoked by your child, having them in place first is preferable to not having them at all. 

Estate planning for addictive children is different but much the same.  With careful consideration you can ensure that you protect your child from their addiction and from themselves. 

The Future Of Retirement and The Importance Of The Revocable Trust

The Future Of Retirement and The Importance Of The Revocable Trust

The Future Of Retirement and The Importance Of The Revocable Trust

As an estate planning attorney, I have had an interesting viewpoint of how the Great Recession affected my estate planning clients. Over the last two or three years, I have noticed a consistent worry of clients during initial conferences. They seem to be more worried in some cases about their children’s ability to retire than their own.

It makes sense. The Great Recession had far reaching effects on our country’s economy and some of those effect are still being felt today. But those with investments, they have not only recovered their nest egg but since increased the size of it handsomely as the stock market has reached all time highs. Retirement age parents, however, are concerned about their children’s student loan debt, costs of housing, delayed family creation and just generally about their well being when they are gone.

I met with a client couple recently who told me that each of their children had graduate degrees from prestigious schools and were now out in the world. One found a job pretty quick since he is in software engineering, but is getting crushed by a $1,500 per month condo rental, plus $1,500 per month in student loans (for the next 30 years). The other child had graduated last year, could not find a job in our area in her chosen field (computer science) and had taken a job as an office assistant at a company in St. Louis. She lives with them.

Each of them told me that they had started watching their spending habits so that they could leave as much of an inheritance to their children as possible, despite their terrific educations and work habits. This is a sea change in estate planning for those with a decent amount of assets to leave to their children.  So what I recommended at the end of our initial conference was a living trust whereby they would each act as the trustees and then when the second spouse had passed away, a successor trustee would take over. In their case, that successor trustee was not their children but a younger brother of the husband.

When the second spouse dies, unlike is often the case in traditional revocable trust planning, the children will not inherit everything. The younger brother will manage the trust for a set number of years at which time the 50/50 split inheritance of each child would be distributed outright. That will be a considerable some based on the couple’s current assets. But the beauty of this delayed distribution is that since the inheritance of each child will not immediately be received it can be invested and grow.

In other words, we are creating a retirement plan for the children via their inheritance. Bills of the children can still be paid as a supplement by the trustee, but the principal remains invested. So upon the death of the second spouse, the balance of any student loans could be paid off but the significant money left can continue to grow. Meanwhile, since the kids have careers starting, they can continue to save for retirement themselves as well. If the inheritance was given to them right away, that may not be the case. The plan we created ensures the kids will have the best of both worlds: A retirement source via inheritance, which will grow from the delay of distribution and the retirement they create for themselves, which should be easier through the assistance of at least some of their bills being paid as needed by the trustee of the revocable trust.

As an aside, I am not a financial advisor but one significant way retirement planning has changed and will continue to change is the loss of guaranteed income. Pensions are largely a thing of the past and workers have to invest more into building a larger nest egg so that they can replace that lost pension check, if necessary, with a draw from the nest egg itself. Many of my clients still enjoy significantly high incomes from combined pensions and Social Security. This can leave their nest egg largely intact. However, their risk tolerance is much lower than someone like their children. This again reinforces the beauty of the plan I outlined above.

Serving As Trustee of A Trust? Not As Easy As It Looks!

Serving As Trustee of A Trust? Not As Easy As It Looks!


One of the services provided by Legacy Law Center is trust administration.  When a person passes away with a living trust (or other type of trust) in place, the assets in the trust must be administered, i.e. managed and/or distributed according to the terms of the trust document.

Serving as a trustee sounds like a glamorous position.  You’re in charge of money and you have a lot of power over that money, right?  Well, it’s not that simple.  For starters, a trustee is a fiduciary.  A fiduciary is a person who has the power and duty to act on behalf of another person (usually referred to as a “beneficiary”) under circumstances that require total trust, good faith and honesty.   A fiduciary must avoid self-dealing (buying trust property themselves at a discount for example) and must avoid conflict on interests.

Here’s where things get tough for most trustees.  They are in charge of a trust in which they are likely a beneficiary and other family members are beneficiaries as well.  Even in the best of families, one person in charge of significant assets is going to create circumstances in which the trustee’s moves and motives are questioned at every turn.

“Why was Mom and Dad’s home sold and not kept?”

“That accountant the trustee hired is too expensive, they should have used my accountant. “

“The trustee is using trust assets for himself.”

“What happened to Uncle Dave’s fabulous gun collection?  Everything just disappeared.”

Rest assured, in most family trusts, once the assets are in control of the trustee, the worst assumptions and second guessing will begin.  In some families it starts on the day of the funeral.  If the trustee lets things fester, trust litigation can develop.

I’ve seen circumstances where the trustee could not take the emotional toll that the role put on them.  They were desperate for my firm to help.   Hiring a trust attorney to assist in the administration of the trust can create a firewall between the trustee and beneficiary while ensuring the trustee carries out their duties effectively.  For example, in the situation where the beneficiaries are already doubting the moves of the trustee even before they have the assets in their control, the trust attorney can send out a letter stating that the beneficiaries are welcome to contact the firm for updates but that updates will come via letter once they are necessary.  A letter from the attorney outlining the timeline for resolution of the trust is often a good way to set expectations.  When that letter comes from the trustee, second guessing can only worsen.

Our firm does not draft trusts without a no-contest provision which states that any beneficiary who files a lawsuit contesting the trust potentially loses their inheritance for doing so.  Now, there are exceptions to these provisions, but courts will uphold them on the belief that if the grantor of the trust (the creator of it) wanted that provision, they meant for it to be enforced.

Remember this as well:  The trustee in most trust situations does not have to rush through the process of identifying assets and distributing them.  That’s a competing problem for a trustee because working too fast can lead to mistakes and a fiduciary that makes mistakes can be personally liable. 

Ultimately, the best move a trustee can often make is to utilize the provision in the trust allowing them to hire professionals to handle the investing of trust assets (financial advisor), to account for them (CPA) and to deal with the legal issues of the trust (attorney).  Once these professionals are hired, a trustee will often find that the mob puts down their pitchforks, that a path with an end in sight develops and that they handle their duties more effectively and efficiently.

One more thing:  We always remind our trustees that they were chosen for a reason and their crazy brother and angry sister were passed over as trustee for a reason.   You were the one chosen because you were the most dependable.



Avoiding Probate: It’s Not Just About Money…

Avoiding Probate: It’s Not Just About Money…



               As an estate planning attorney, a central goal that I preach is for my clients to avoid probate.  Most of my clients associate probate with something akin to the plague and people like bankers, insurance agents, financial advisors, TV hosts and society at large have done a good job educating clients on the simple premise that they should avoid probate at all costs.

But why?

Most people would guess the expense.  That is certainly a legitimate reason.  In Missouri, a probate administration can lead to costs to the court, big expenses being paid to your personal representative (also known as the executor) and, if you want the easy version of probate in Missouri, independent administration, the services of a knowledgeable and experienced probate attorney.  In a recent probate, an approximately $450,000 estate ended up costing about $1,000 in costs to the court for filing fees, inventory fees and various other expenses and approximately $31,000 in fees split equally between  the personal representative and attorney .

Think about that for a second…that represents almost a 7% loss in the value of your probate estate due to costs and fees, or one more percent than you pay to sell a home!  But here’s a big difference…real estate commissions are unavoidable.  Probates costs and fees are not.

But forget about money and costs for a second, because there are three other huge reasons to avoid probate, that are largely overlooked.

Those are:

  1.   Time: In Missouri, you have to wait 10 days after death before you can file in most cases and then the estate cannot be closed for at least six months.  Best case, therefore, you are looking at a 190 day process.  In most cases, you can add at least a couple of months.  In some cases, the estate won’t be closed for at least a year, sometimes longer.  So, not only have you lost a loved one, but now as a beneficiary or heir of an estate you have to wait a long time to get your inheritance!
  1.  Complexity:  I work on probates every day and while I do a great job for my clients I have to say….I don’t like doing them.   Absolutely cannot stand them.   St. Charles County has a terrific probate division but many of my probates are in St. Louis County and they are a nightmare to deal with.  If you can get through to someone, you will get two different answers from two different people.  Every county has a different set of procedural details that must constantly be adhered to, which is tough because those details seem to change by the month.   Probates are comparable to getting your teeth pulled.  The smallest details can delay them for days and even weeks.
  1. Family Issues / Strife:  Imagine with your family who would be more than a little bit anxious / conspiratorial about an inheritance owed to them.  If someone makes out a will and then dies, unlike on TV, there is generally not a reading of the will.  That is largely a Hollywood created fiction.  In larger estates with a variety of distant relation family members or different beneficiaries (like people that don’t know each other), it might make sense to have a will reading.  So people think that something is being hidden from them when the personal representative and the attorney for the estate don’t just cut them a check.  Probates cause family tensions and in families where there is already tension, it can only aggravate things.  As I noted above, you have to wait at least 190 days in most probates before the estate can be distributed and closed and that’s because creditors have a right to make a claim against the estate.  I very rarely authorize early disbursement of an estate for this reason.  Who knows who is out there claiming they are owed money.  If the money in the estate is immediately distributed, how are you going to get it back if a creditor shows up out of the blue in the last month making a huge claim against the estate?

Half of my estate planning clients are meeting with me because they know they need to.  The other half are meeting with me because they just had some terrible disaster happen in there family or watch it affect someone they know, so now they want to avoid it.

Here’s the silver lining:  It is easier than ever to avoid probate with a living trust or even without a living trust under some circumstances.  In less than an hour Legacy Law Center can sit down with you, figure out what your particular circumstances are, what you need based on those circumstances, tell you what it costs and give you a accurate timeline of when it will be completed, signed and in your hands protecting you and your family.