Winners, and their Families, Avoid Problems

By Mark F. Winn CONTRIBUTOR

The tools available to a carpenter are hammers, nails, and power tools. The tools available to an estate planning attorney are: Wills, Trusts, Powers of Attorney, Advance Directives, Contracts, and Deeds. Matters we address are manner of ownership of assets, present and future beneficial interests, covering contingencies, managing tax uncertainty. If used properly, these tools can avoid legal problems and headaches. What problems? What headaches? Unnecessary legal and probate court costs, unnecessary family conflicts, unnecessary taxation, and lack of privacy.

survivorship rights or designated to go to the survivor. So, Mom may think that she should just put one child (let’s call him Clark) on the house and the accounts. Mom thinks Clark will “do the right thing” and make sure his siblings get their share. This is an accident waiting to happen. If Clark is sued while Mom is alive, can Mom’s house and assets that she owns with Clark be in jeopardy? Yes. If Mom passes, and then Clark gets divorced, can his wife get half? Yes.

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In the game of golf, the winner has the lowest score. In the arena of estate planning, the winner is the one who plans ahead and structures their legal affairs to avoid problems. Over the past 19 plus years of helping people with estate planning, I’ve learned smart people who seek out and follow an experienced lawyer’s advice are the ones who are successful. People who try and configure their own solution based on something they read on the internet, or based on what a friend told them.... are the ones who are more likely to experience problems. Their families often experience the problems.

For example, let’s say Mom survives Dad and basically inherits everything from Dad free of trust. This transfer may not have been easy -- the assets may have all been owned jointly with

If Mom passes and Clark’s siblings plead with Clark for their share, are they legally entitled to it? No. There is a better way. Mom hires a lawyer and creates a Trust Agreement where she and Clark are co-trustees (co-fiduciaries), and that Clark can act alone, as Trustee, while Mom is alive. Mom wants Clark to handle the bills, so she makes him a co-trustee with the full authority to act. Mom’s Trust Agreement directs Clark to distribute the property to he 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 Clark is sued while Mom is alive, can Mom’s house and assets that she owns with Clark be in jeopardy? No. If Mom passes, and then Clark gets divorced, can his wife get half? No.

If Mom passes and Clark’s siblings plead with Clark for their share, are they legally entitled to it? Yes.

What is the moral of the story? Winners, and their families, plan ahead to avoid problems.

Mark F. Winn, J.D., Master of Laws (LL.M.) in estate planning, is a local asset protection, estate, and elder law planning attorney. mwinnesq.com