Avoiding legal problems is the name of the game

What are the tools available to an estate planning attorney? Wills, trusts, powers of attorney, advance directives, contracts and deeds.

What are the things we address? Present and future beneficial interests, covering contingencies and managing tax uncertainty. All of these tools are designed to minimize, if not avoid altogether, legal problems, costs, family conflicts and headaches.

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 fewest strokes. As is the case with golf, in the arena of estate planning, we are trying to avoid problems. Fortunately, it is not too difficult to be successful in this arena. 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 who are likely to experience unintended negative consequences.

For instance, let’s say Mom survives Dad and basically inherits everything from Dad free of trust. Okay, so that transfer may 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 may think that she should just put one child (let’s call him Frank) on the house and the accounts and that child will “do the right thing” and make sure his siblings get their share.

Well, this is an accident waiting to happen.

If Frank is sued while Mom is alive, can Mom’s house and assets that she owns with Frank be in jeopardy? Yes.

If Mom passes and then Frank gets divorced, can his wife get half? Yes.

share, are they legally entitled to it? No.

There is a better way. Mom hires a lawyer and creates a trust, and she makes it so she and Frank are co-trustees and that Frank can act alone while Mom is alive. Mom wants Frank to handle the bills, so she makes him a co-trustee with the full authority to act. Mom’s trust directs Frank 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. Now, under this better way:

If Frank is sued while Mom is alive, can Mom’s house and assets that she owns with Frank be in jeopardy? No.

If Mom passes and then Frank gets divorced, can his wife get half?

No.

share, are they legally entitled to it? Yes.

Isn’t that better?

Mark F. Winn, Master of Laws (LL.M.) in Estate Planning, a local asset protection, estate planning and elder law attorney.