Planning to Set-Up Your Living Trust "Later"? A Cautionary Tale
It was a bitter falling out.
No one can quite remember what it was about, but Louisa and her daughter hadn't spoken in 15 years.
On the other hand, Louisa was very close to the brother she had cared for since an accident had disabled him.
It was understood by the family that her modest estate and life insurance policy would be held in trust for her brother, not her already well-to-do daughter.
To formalize her wishes, Louisa made an appointment with a trust attorney to set up a living trust, with her brother as beneficiary.
But she failed to follow up.
Perhaps she wasn't sure she could afford the trust's setup fee.
Or maybe she didn't get around to collecting the needed documents, or perhaps she simply didn't want to think about her own death.
She also had procrastinated on naming her brother as the beneficiary of her life insurance policy.
When Louisa was found dead of a heart attack in her apartment, her brother prepared to assume his role as executor of the trust.
But there was no trust.
As a result, the estate had to undergo a lengthy and very public probate process, costing the estate nearly $50,000.
The process pitted Louisa's daughter against her brother, who tried to dispute her claim to the estate.
But trust law is very clear that estates not designated in a will or trust go directly to the next of kin, defined by law in a strict hierarchy that ranks children above siblings.
With no trust in place, the judge was obliged to rule against the brother, and thanks to Louisa's procrastination, everything she owned, including her home and the life insurance policy, went to her estranged daughter.
Louisa's daughter was sorry her mother had not made a will or trust, and sorry she hadn't mended relations with her mother while she was still alive.
But not sorry enough to share the estate with the disabled uncle with whom she had just had a bitter fight in probate court, and he was left to put the pieces of his life back together without financial help.
What would Louisa have wanted for her daughter and her brother? Would she have wanted a family feud and one-half of the estate's value eaten up in probate fees? What do you want for your heirs? If you don't have a living trust-or at least a will, if your estate is small-consider what you will put them through if they have to go through probate.
To find out what you need to do to protect your estate with a living trust, consult a bar-certified attorney who specializes in estate planning.
No one can quite remember what it was about, but Louisa and her daughter hadn't spoken in 15 years.
On the other hand, Louisa was very close to the brother she had cared for since an accident had disabled him.
It was understood by the family that her modest estate and life insurance policy would be held in trust for her brother, not her already well-to-do daughter.
To formalize her wishes, Louisa made an appointment with a trust attorney to set up a living trust, with her brother as beneficiary.
But she failed to follow up.
Perhaps she wasn't sure she could afford the trust's setup fee.
Or maybe she didn't get around to collecting the needed documents, or perhaps she simply didn't want to think about her own death.
She also had procrastinated on naming her brother as the beneficiary of her life insurance policy.
When Louisa was found dead of a heart attack in her apartment, her brother prepared to assume his role as executor of the trust.
But there was no trust.
As a result, the estate had to undergo a lengthy and very public probate process, costing the estate nearly $50,000.
The process pitted Louisa's daughter against her brother, who tried to dispute her claim to the estate.
But trust law is very clear that estates not designated in a will or trust go directly to the next of kin, defined by law in a strict hierarchy that ranks children above siblings.
With no trust in place, the judge was obliged to rule against the brother, and thanks to Louisa's procrastination, everything she owned, including her home and the life insurance policy, went to her estranged daughter.
Louisa's daughter was sorry her mother had not made a will or trust, and sorry she hadn't mended relations with her mother while she was still alive.
But not sorry enough to share the estate with the disabled uncle with whom she had just had a bitter fight in probate court, and he was left to put the pieces of his life back together without financial help.
What would Louisa have wanted for her daughter and her brother? Would she have wanted a family feud and one-half of the estate's value eaten up in probate fees? What do you want for your heirs? If you don't have a living trust-or at least a will, if your estate is small-consider what you will put them through if they have to go through probate.
To find out what you need to do to protect your estate with a living trust, consult a bar-certified attorney who specializes in estate planning.
