Varian Law LLC

A Trust Can Reduce Risks to Your Estate

What type of Trust is right for you?

There are many different types of Trusts, and they are all designed to achieve many different types of goals.  There are also many ways to use various types of Trusts within an estate plan, and it most likely will be beneficial for you to learn which ones will help achieve your goals, according to The Daily Sentinel in “Are you prepared for threats to your estate?”

Generally speaking, your Will ensures that your probate assets go to the people you want to receive them.  However, a basic Will may not achieve your goals.  In comparison, the proper use of a Trust can protect your assets and help ensure that your assets are distributed to the people you want, when you want, and how you want. One of the goals of a well-drafted Trust is to protect you, your Estate and your loved ones from unwanted and unintended outcomes.

Here are a few ways Trusts can protect your legacy and your family:

• If your spouse predeceases you and you are incapacitated from a stroke, a fall or other illness, a Trust can be used to ensure that your assets are protected and used to take care of your needs.
• Seniors, especially those who have lost a spouse, tend to be vulnerable to scams from both people they know and strangers who connect with them through telephone or email. A properly designed Trust can place a layer of protection on the assets and require a second (or even third) person to release funds.
• If your beneficiaries have financial problems, get divorced, encounter legal issues, or develop drug or alcohol problems, a properly designed Trust can protect your Estate from being taken by others.

Every family is different, and every family presents its own unique circumstances.  Everyone should meet with an experienced estate planning attorney and talk about how your estate plan can be designed to protect your family.

One last thought: if your family situation is so overwhelming that you feel like doing nothing, think again. If you don’t have a properly designed estate plan in place, your decades of work may be squandered, your children may have to spend more money in the court system than you would have wanted, and your legacy may disappear. 

Reference: The Daily Sentinel (Dec. 1, 2018) “Are you prepared for threats to your estate?”

A Trust Could Prevent People in Distress From Signing Away Their Inheritance

A parent may be shocked when their child gives away their inheritance for some quick money.

A recent MarketWatch article described the anguish of being distressed and giving up your inheritance for some quick money in "My drug-addicted friend signed away his $800,000 inheritance to his brother — now he’s clean, can he get it back?"

A reader wrote in with a story about a friend who inherited $800,000 from his father's will. The friend was addicted to drugs and agreed to sign his rights to the inheritance away to his own brother for only $10,000.

Now that the friend is sober, the reader wonders whether there is any way to get the inheritance back.

The column writer suggests that the friend hire an attorney and sue the brother for fraud based on the premise that he knowingly took advantage of someone who was mentally incapacitated. That might work in some cases.

But not so fast.

There are some states and courts that are not quick to undo agreements that drug addicts voluntarily enter into, especially if it cannot be proven they were high at the time of making the agreement.

This is the type of scenario about which many parents have nightmares, when it comes to their addicted children. Leaving the child an inheritance outright can quickly be lost.

Fortunately, there are ways to avoid the problem altogether without disinheriting the drug-addicted child.   Various forms of Trusts can be used to protect the inheritance with a trustee who is granted the discretion to distribute the money for the benefit of the child.

A qualified estate planning attorney or trust attorney can guide you in a plan that fits your unique circumstances.

Reference: MarketWatch (Jan. 24, 2017) "My drug-addicted friend signed away his $800,000 inheritance to his brother — now he’s clean, can he get it back?"

There are Exceptions to Attorney-Client Privilege

The Attorney-Client Privilege is important in Estate Planning, but there could be exceptions to that important rule.

The Attorney-Client Privilege is one of the key doctrines of our legal system, but there are exceptions as explained by the Wills, Trusts & Estates Prof Blog in "Treasure-Hunter's Documents Might Be in Deep Water."

This doctrine even has an important place in Estate Planning because in order to create an estate plan the client needs to be able to tell the estate planning attorney about their assets. But the client might not be willing to reveal everything if the attorney could later be forced to testify in a legal dispute.

In the case discussed, a former treasure hunter hired an attorney to create an offshore trust. The client then got financing for an expedition in which he recovered gold from a sunken ship.  However, the client then refused to pay the people who had financed his treasure hunt, and they are asking the Court to force the attorney to reveal the trust documents so that they will have an easier time recovering the money.

The Judge in the case, while not making a decision, has acknowledged that the crime-fraud exception to attorney-client privilege might apply in this case. In other words, if an attorney's services are knowingly used to commit a crime or a fraud, then the Attorney-Client Privilege does not apply.

A qualified Estate Planning attorney can guide you in creating an estate plan that meets your unique needs, and explain the exceptions to the Attorney-Client Privilege that could be applicable in the context of estate planning.

Reference: Wills, Trusts & Estates Prof Blog (Nov. 17, 2016) "Treasure-Hunter's Documents Might Be in Deep Water."