Now that you have set up your trust, the most important step is funding the trust. It is very important to transfer assets into the name of your trust, or the assets will end up in probate or conservatorship proceedings. To fund your trust, you must transfer assets, such as your house, bank accounts, and vehicles, into the trust name by legal documents such as title, deeds, and change of beneficiary to the trust name. Assets can be transferred to the trust both at the time of the creation of the trust and also at later times.
In order for your Trust to function properly, it’s not enough for you, as the Trustmaker (also called Grantor), to simply the sign trust agreement. After the agreement has been signed, you must â€śfundâ€ť his or her assets into the trust.
What does it mean to â€śfundâ€ť a trust? This refers to taking assets that are titled in the individual your name or in joint names with others and re-titling them into the name of your Trust, or taking assets that require a beneficiary designation and naming the trust as the primary or secondary beneficiary of those assets.
For example, you need to do the following to fund your trust:
- Â take your vehicle titles (cars, campers etc) into the license bureau and request a change of title adding TOD (transfer on death) to the trust name; and
- Â change the beneficiary designation on your life insurance to the trust name; and
- Â Bank accounts, CDs and some investments can be designated as POD (pay on death) to your trust; and
The ultimate goal of funding your trust is to insure that your property is governed by the terms of the trust agreement and not probate court. This, in turn, will allow the trustee to manage accounts held in the name of the trust in the event you become mentally incapacitated. Upon your death, your trust allows your successor trustee to more easily manage and then transfer accounts held in the name of the trust to the ultimate beneficiaries named in the trust agreement.
Transferring bank accounts and investment or brokerage accounts into your trust can be easy or complicated depending upon the rules followed by the institutions that hold your accounts. Some institutions will simply change the name on your account from your individual name into the name of your trust, while others will require you to close the original account and open a new one in the name of your trust. Suffice it to say, that regardless of the rules your institution follows, it is important to transfer your bank and investment accounts into your trust in order to properly plan for disability and avoid probate.
Â GENERAL STEPS TO FOLLOW TO FUND YOUR TRUST
DO NOT make your trust the beneficiary of an annuity or IRA or any other retirement account or fund due the tax consequences.
Instead list your children or other loved ones the beneficiary these accounts.
- Write a Letter of Instruction – Write a letter of instruction to your institution which requests the re-titling of your account from your name into the name of your trust. Include your account number, the name of your trust, your Social Security Number, your mailing and email addresses and your phone number.
- Deliver Your Letter of Instruction – If possible, hand deliver your Letter of Instruction to your bank or financial advisor. Take your trust documents with you because inevitably someone will ask to see your trust agreement. If you can’t hand deliver the letter, mail it directly to the bank branch where you opened your account or to your financial advisor.
- Confirm Transfer of the Account – Follow up by phone or mail to insure that the re-titling of the account into your trust has been completed. You should also check your account statements to verify that the name of your trust has been properly listed in place of your individual name. Common abbreviations to look for include: “John Doe, TTEE, John Doe TR dtd 1/1/08;” or “John Doe, TTE, John Doe Trust UAD 1/1/08.”
- Place Verification Documentation with Your Trust Agreement – Place documentation with your trust agreement which verifies the funding of the bank or investment account into your trust.
WHEN FUNDING YOUR TRUST, AVOID THE FOLLOWING:
- Probate – If any of your property isn’t titled in the name of your trust when you die, it will need to be probated.
- Ancillary Probate – If you own real estate in more than one state and you’ve failed to re-title all of it into your trust before you die, then your loved ones may be faced with probate in your home state and ancillary probate in each additional state where you own property.
- Increase in Estate Taxes – If all of your accounts are owned as joint tenants with right of survivorship or as tenants by the entirety with your spouse instead of in the name of your trust when you die, then the trust established may not be funded and you’ll be wasting your entire estate tax exemption.
- Income Tax Problems – If you fail to update the beneficiary designations for your life insurance and retirement accounts to coincide with the terms of your trust before you die, then your beneficiaries won’t be able to take advantage of important estate and income tax strategies.
If you became seriously ill or were in a major car accident what would happen? Do you have your documents in order? Do you have a Healthcare Directive? What about a Power of Attorney and a Will?
Someone else may temporarily need to make decisions for you or help you with your banking. To do this they will need a Power of Attorney. That Power of Attorney may need to speak with the insurance company or your attorney. That person can only do this with the proper legal document.
- Writing down your medications that you currently take
- Pet routines and medications
- Passwords to pick up voicemail messages and emails
- Your calendar, is it online, how does someone access it?
- Where is your address book?
- Do you have a PO Box, where is the key?
- Are your bills paid automatically online? Write down which bills are on autopay
- Do you have a home alarm system? Write down how it works.
- Are there any quirks about your home?
One focus of my law practice is Estate Planning, which can have a long-lasting impact on your loved ones. Consider these four reasons why you should have an estate plan, in order to protect your family.
1. Prevents Wealth From Going To Unintended Beneficiaries
Without an estate plan, the courts will often decide who gets your assets, a process that can take years. After all, a court doesnâ€™t know which sibling has been responsible and which one shouldnâ€™t have free access to cash. Nor will the courts automatically rule that the surviving spouse gets everything.
2. Protects Families With Young Children
Nobody thinks of dying young, but if you’re the parent of small children, you need to prepare for the unthinkable. In order to ensure that your children are taken care of, in a manner that you approve of, you’ll want to name guardians. Without such a will, the courts will again step in.
3. Spares Heirs A Big Tax Bite
Estate planning is all about protecting your loved ones, which means in part giving them protection from the IRS. Even with just a little bit of estate planning, you can reduce much of their federal and state estate taxes or state inheritance taxes.
4. Promotes Family Harmony
A Power of Attorney will enable you to choose who controls your finances and assets if you become mentally incapacitated. A Will ensures that your assets are handled in the way that you intend them to be after your death.
Good Estate Planning is the best protection you can offer your family.
Call me 636-462-2170 to make a complementary half-hour appointment to discuss your estate plan.
A decision from the U.S. Supreme Court on same-sex marriage is expected later this month. Judges are eagerly awaiting the ruling that could determine whether gays and lesbians have a constitutional right to marry or whether state bans against same-sex marriage can remain in place. Same-sex couples can already marry in 32 states, parts of Kansas and Missouri and the District of Columbia.
Judges eagerly await this ruling and hope that it will be definitive â€“ something clear cut and not ambiguous will put the judiciary back where they are comfortable from ruling from.
The ruling on same sex marriage has wide-ranging implications in law and will impact probate, wills and estates (the right to inherit) as well adoptions, divorce, and child support among other family law matters.
The U.S. Supreme Court is expected to rule the last week of June.
Clients often ask me what to do first when a loved one dies. The client is overwhelmed and needs a clear plan of what to do next. Here is a quick checklist to follow to help you in a time of distress. It does not replace the need to consult with you attorney, it only helps to keep you on the path.
Notify close family members and friends, including the love oneâ€™s minister
Make an appointment with the funeral home and arrange funeral, burial, cremation, and memorial services (request several death certificates)
Notify the loved oneâ€™s employer, if any
Contract your employer and make arrangements for bereavement leave
Locate important legal documents including insurance policies
After the funeral and when you have death certificates in hand, visit the attorney
Contact the loved oneâ€™s financial advisor, labor union, professional organizations, and past employers (regarding pension plans and IRAs)
Report the death to the Social Security office
Notify credit card companies
Notify banks and other financial institutions to re-title or distribute accounts
Notify utility companies and local police (to drive by loved oneâ€™s home until sold)
Contact mortgage company
File federal and state taxes for loved one
Additionally, when visiting with your attorney you will need to bring important documents with you such as the death certificate, trust documents, will, bank statements, mortgage papers, insurance policies, most recent IRA statements, most recent credit card statement, and titles to vehicles.
After the death of a loved one, you yourself will likely need to reevaluate your estate plan, making sure you have all the necessary documents in place. Update your beneficiary designations on your IRAs and life insurance policies and update your insurance needs.
Kathryn J. Synor is now ranked Top 10 Under 40 attorney for excellence in the field of Family Law for 2014!July 24, 2014
Kathryn J. Synor of the Law Office of Kathryn J. Synor, LLC has been selected by the National Academy of Family Law Attorneys as nationally ranked Top 10 Under 40 attorney for excellence in the field of Family Law for 2014.
The National Academy of Family Law Attorneys is a professional organization that is dedicated to helping the public find the most premier family law attorneys in the nation. By providing the public with the most accurate, up-to-date listings of top ranked attorneys in their states, the NAFLA helps ensure quality representation for those in need of a family law attorney.
The NAFLA uses a thorough selection process to determine the top family law attorneys in each state. With thousands of attorneys in each state, the NAFLA’s rigorous, independent selection process resolves the challenge of attorneys claiming to be “the best” without basis for such claims. When needed, finding a well-qualified family law attorney is imperative, and the NAFLA’s process leaves no doubt as to whom the preeminent family law attorneys are:
â€˘ The attorneys who make the NAFLA list must first be nominated by a licensed practicing attorney.
â€˘ Second, the NAFLA research staff verifies the nominated individuals meet the minimum requirements of membership in the NAFLA.
â€˘ The NAFLA processing committee selects a portion of the nominated attorneys to advance to the final selection stage.
â€˘ Finally, the NAFLA Board of Governors officially selects the top family law attorneys in each state.
In addition to family law matters such as adoption, divorce and child support and custody modifications, Ms. Synor also dedicates a large portion of her practice to estate planning and probate law, landlord/tenant issues and collections. Attorney Kathryn J. Synor can be reached at 636-462-2170 or at 250 E. Wood St. in Troy.
Only a few years ago, people set up living trusts almost exclusively to save on taxes. Today, they are used to avoid Probate and for other purposes. This article explains the living trust. It is not meant to be a comprehensive discussion of the subject, but it should help you to understand a typical living trust and its plan.
What is a living trust?
It is imaginary, a “legal fiction.” It is created by a trust document, either a “trust agreement” or “declaration of trust.”
- The trust document designates one or more individuals or corporations to act as “trustee.”
- The trustee is directed to accept title to or ownership of property, either real property or personal property. The property in the trust is sometimes referred to as the trust “corpus” or “res.”
- The trustee owns property “as trustee” only,Â notÂ individually.
- The property is to be held and used for the benefit of one or more “beneficiaries.”
- The trust document sets out in detail how the trust is to be administered. It contains the directions of the person who sets up the trust (the “grantor” or “settlor”). If it is properly drafted, that document will guide the trustee and the beneficiaries throughout the entire term of the trust.
There are different kinds of trusts. A trust included in a will (which is to take effect only after a person dies) is called a “testamentary” trust. A trust set up during a person’s life is called an “inter vivos” trust or “living” trust. This is not the same as a living will, which directs removal of life support in the face of certain death. A trust that can be changed after it is signed is called “revocable.” A trust that cannot be changed is called “irrevocable.” Irrevocable trusts are most often used in estate tax planning or where the grantor wants to lock in certain terms of the trust. Most people want to keep their trusts flexible and set up revocable trusts.
Advantages of the Living Trust
When the trust is done right, it works like magic and avoids all Probate! It even avoids multiple Probate proceedings in different states where real estate or other assets are located.
- Money and assets are distributed sooner.
- The trust is private, although not totally. Some financial institutions may require or request copies of the trust agreement before complying with its terms, but there are virtually no “public” aspects as with Probate.
- Save attorney’s fees and costs. Assets are transferred to the trust while the grantor is alive and competent, and multiple sets of bank accounts are not necessary.
- A more orderly process. Without a trust, it is often more difficult to find asset information at death and to collect the assets.
- Flexible. So long as the grantor’s intentions can be expressed in words, they can be embodied in a trust.
- Easy to amend. A trust can be amended by a document signed only by the grantor. No witnesses or other formalities are necessary as with a will or codicil. The reduced cost of amendments may ultimately save some of the additional up-front costs of a living trust.
- Less important if the original documents are lost. Copies of a trust document can substitute for a lost original. If an original will is lost or misplaced, the law presumes and a Court can rule that the will was revoked, and the estate will then be distributed only to the decedent’s heirs according to strict Illinois law.
- A trust is more difficult to contest than a will or codicil, because the grantor not only signed the documents but acted on them.
- So long as all interested parties agree, it is easier to “change” the terms of a trust than a will, even after the grantor dies or becomes incompetent.
Disadvantages of the Living Trust
- Up-front costs are more than for a will.
- Assets must be properly transferred to the trust. Time must be spent by the grantor after the trust is set up to see that all of the transfers are made. If they are not, the trust may provide little or no savings, and Probate may still be necessary.
- Claims of creditors of an estate are cut off six months after appointment of the executor (with some exceptions). Claims against a trust can be pursued for two years from the date of death.
- Some assets may not be held in a trust without adverse income tax effects.
Neither Advantages Nor Disadvantages But Important
- A will is still necessary, although it is simpler, is less likely to need updating, and will probably never have to be “used.”
TRIAL TIPS FOR CLIENTS
Preparation is the key to successfully presenting accurate information in court. Â Â Â
WHAT TO WEAR?
We advise our clients to dress conservatively. Court is a somber, conservative and non-colorful environment, so the dress should be consistent with that. Solid navy blue outfits are almost always appropriate. Men should avoid broad pin stripes or expensive fabrics. Alligator or other expensive shoes and cuff links should be avoided. Women may wear dresses, skirts or slacks. Coats for women look good in court. Blouses should be plain with no designs or â€śfrills.â€ť Women should not wear clothing that is tight or too colorful.Â Red, zebra, leopard, or leather should be avoided at all costs.
WHAT HAPPENS WHEN YOU GET THERE?
It is typical that the time shortly before the court is somewhat hectic and disorganized. This is normal. Do not be alarmed by it. There may be several cases or â€śmotionsâ€ť which are also set for that day, so other lawyers, parties and witnesses may be there at the same time, milling about. Your attorney may be involved in conversations with court personnel or with lining up witnesses.
Typically, the Judge asks to see the lawyers for each party in the Judgeâ€™s office. The purpose is to find out about the case, what issues are to be decided and how the trial is to be managed. The court may also explore a settlement. As a matter of fact, it is quite common that extensive settlement negotiations are conducted on the day of trial with the assistance of the Court. Many times, cases are settled on the day of trial, and no testimony is ever presented.
When the judge hears from the lawyers about what facts may be presented at trial, he gives the lawyers guidance as to how he might rule. The lawyers use this guidance to formulate appropriate settlement positions for their clients. You should understand, however, that the court is rarely actually deciding an issue or â€śprejudgingâ€ť the case. And, settlement on the day of trial is just that, settlement. You always have the option of deciding not to settle any issue on the day of trial. If you feel any pressure to settle, please advise your lawyer.
CONDUCT AT TRIAL:
You should conduct yourself in court with decorum. You should not be boisterous or engaged in joke-telling or laughing. You should not curse, either on the stand or in and around the courthouse. You should be in complete control of your demeanor and your emotions. Do not react to the other party or to any testimony you hear or rulings made by the court. The Court will be watching how you conduct yourself. Avoid expressions, shaking your head, glaring, and scoffing, and wincing, wiggling, or sound making.
If you need to communicate with your lawyer, write a note on a piece of paper and pass it to him or her. Communication is important, but take care to make the communication discreet and not so frequent that is becomes distracting to the lawyer. Completely avoid chewing gum, hard candy or chewing tobacco or snuff in the courthouse.
ORDER OF PROOF:
The plaintiff presents his or her proof and witnesses first, then the defendant. The plaintiff may then conclude with what is known as â€śrebuttal.â€ť The plaintiff gets the last word. If you are a defendant, do not worry too much about this advantage. The Court is aware that you do not have this opportunity. You may be called to the stand as a part of the other partyâ€™s case. This is called being called â€śas an adverse witness.â€ť For example, a plaintiff might call the defendant as the very first witness in the case. If this happens to you, do not be alarmed by it. The key is that you are now aware beforehand that it could happen.
ORDER OF QUESTIONING:
When a party puts a witness on the stand that witness is subjected to what is known as â€śdirect examination.â€ťÂ During this portion of the examination, the attorney must ask questions in a way that does not suggest the answer. When the direct examination is complete, the other attorney has the right to ask questions during the phase known as â€ścross examination.â€ť Cross examination can be somewhat difficult. The cross examiner has a wide latitude in the subject and manner of questioning. An effective cross-examiner will use â€śleading questions,â€ť that is, questions that suggest the answer. â€śIsnâ€™t it true that….â€ť When cross is finished, the other lawyer has the right to more questions in what is known as â€średirect.â€ť On occasion, the Judge will ask questions. Do not be alarmed if this happens.
When being asked a question, look at the person asking the question. When answering, look at the Judge. The Judge is the one you are communicating to, not the attorney asking the questions. When opposing counsel is questioning you, look at him or her, but do not become transfixed. Again, remember, your purpose is to communicate with the Judge, not to impress or beat or outsmart the opposing counsel. Take your time. There is no hurry. This is not a test and you are not being graded for the speed of your answers. If you do not understand a question, say so. Make sure you understand exactly what is being asked. If you do not recall something, state that you do not recall.
Opposing counsel may try to get you to speculate or guess. Do not fall into that trap, but you must also avoid being difficult as a witness. When answering questions, try to answer the question, first by saying yes or no, if that is what is called for. After answering, begin explaining or qualifying your answer. A witness who refuses to answer questions directly appears to be avoiding the truth.
If you are asked if you have talked to anyone about your testimony or your case, answer, â€śof course, I have talked with my attorney.â€ť Then answer whom else you have talked to. Many people fear this question and the answer. Donâ€™t. There is nothing wrong with talking to people about your case, and it is appropriate, of course, to prepare for trial with your attorney.
When answering, do not say â€śuh huh,â€ť or simply nod your head. You must say, yes or no. The reason is that the court reporter must record your testimony.
Do not talk too fast. This makes it difficult for the reporter to transcribe your testimony. Donâ€™t talk too slow, as that may appear unnatural. Do not talk when someone else is speaking. Wait for the questioner to finish his or her question.
Do not argue. Do not ask questions. If you have a question, say, â€śI donâ€™t understand,â€ť and explain why.
Under no circumstances should you lose your temper.Â If you have emotion about something, it is appropriate to display it, but never attempt to show emotion because you think it will help. Try to avoid too much crying. Judges can be turned off by too much emotion or crying and some Judges have been known to direct witnesses to stop crying.
When there is an objection, stop talking. The judge will rule on the objection and instruct you whether or not and how to answer the question.
Do not argue with the Judge or address questions to him or her.
If you are asked a question that may require you to answer about a possible crime, say, â€śIâ€™m not sure how to answer that. May I confer with my attorney?â€ť The most common questions in family law cases that deal with crimes are the use of drugs or questions dealing with failure to report income on income tax returns.
In relatively small cases, it is not unusual for the judge to render his or her ruling at the end of the trial. However, in cases that are difficult or complicated, it is common for the court to â€śtake the matter under advisement.â€ť It is common in those cases for the Court to ask the lawyers to prepare suggested findings for the court to read. Decisions can typically be expected within 30 days from the date that the trial is over or the court receives the suggested findings. However, it is possible for a court to take as much as six months to make a decision.
March 14, 2014
First ask about the cost of legal representation. If your situation will require more work beyond the first consultation, remember to ask for the lawyer’s fees in writing. You do not have to hire the lawyer after the initial consultation. Feel free to find aÂ lawyer with whom you are comfortable. Attorneys frequently have Attorney-Client Fee Agreements.
Second be prepared for your appointment. When you call the lawyer for an appointment, ask what papers you should bring to the first consultation. Be ready to give the lawyer all the background information relating to the situation. You may also wish to prepare questions to ask the lawyer.
Third be efficient. If you do hire a lawyer, don’t make unnecessary phone calls to the lawyer. Most lawyers charge for the time spent on phone calls with clients. Keep a written list of all items you want to check with your lawyer and cover them in one phone call or ask them at your next scheduled appointment.
Fourth, know what you sign. Before you sign a document, ask your lawyer to fully explain it.
Keep complete records. File any material you received from your lawyer in one place.Â Your file is often the best way to answer your questions about the case.Â Don’t hesitate to ask for copies of all letters and documents involving your case.Â You should keep the fee agreement in your file.
Attorneys’ fees are based on several factors such as the complexity of the matter and the amount of time spent serving the client. Most often you will see fixed fee and hourly fee arrangements.
Lawyers will request a retainer or deposit as a down payment in advance of representing you. It may be charged by an attorney to handle a particular case and will be applied as a credit on subsequent billings.
A fixed fee is a set amount charged for services such as drafting a simple will or handling an uncomplicated real estate transaction.
Most attorneys have established hourly or unit rates for their services. There are no uniform, profession-wide figures and rates may vary widely depending on factors such as the attorney’s experience and reputation. In addition to the hourly or unit rate, the client will be charged for any direct, out-of-pocket expenses the attorney incurs such as faxes, copies, and the like.
A fee can be set by the court for such legal services as handling an estate. When reviewing the attorney’s application for fees, the judge will consider the amount of work required its complexity, the skill required and the lawyer’s usual rates.
The type of fee charged is usually controlled by the type of case. For example, in some divorce cases where both parties agree on matters of settlement, the attorney may be able to set a fixed fee. But when the parties do not agree, the attorney may only be able to indicate what the minimum will be, charging for additional time expended beyond the original estimate.
You may reduce the cost of your legal services by trying the following:
-When meeting with an attorney regarding a problem, bring along all documents that might be pertinent. Also, prepare a written statement of the problem and the solution you desire.
-Present all the information you have, even though some of it may seem unfavorable to your case.
-Instead of making frequent phone calls or visits, ask the attorney to inform you of developments as they arise.
-Finally, in evaluating the cost, remember that much of an attorney’s professional services are rendered when the client is not present.
What is Estate Planning?
“Estate” is the legal term used to define your property and moneyâ€”basically, everything that belongs to you. Estate planning attorneys tell you different strategies you can use to transfer your belongings after you die. By planning your estate, you can maximize its value by minimizing taxes and eliminating court costs and interference. Estate planning attorneys also help you control and protect your estate during your lifetime, by writing documents that allow you to transfer property and money to children, charities, or others in a way you desire.
The basic tools used in estate planning include a Will also known as a Last Will and Testament, Trusts, when needed, Powers of Attorney for health care and financial needs, Advanced Healthcare Directives or what used to be called a Living Will and Beneficiary Deeds.
Powers of attorney for healthcare may help you avoid guardianship while financial powers of attorney may help you avoid conservatorship when you are incapacitated or become incompetent. An Advanced Healthcare Directive protects you from unwanted death prolonging medical procedures. Finally, a Beneficiary Deed helps you to avoid probate by transferring real estate upon your death. And Trusts are most often used with blended families or specifically to avoid estate tax consequences.
To learn more about estate planning, wills, and powers of attorney and how to avoid probate, in Lincoln, Pike, Warren and St. Charles Counties make an appointment today.