Many clients understand the benefits of trusts because of the past 25 years of the marketing of revocable living trusts. Clients, however, don't always understand what makes trusts work. Still today, many lawyers draft simple trusts that are little more than a "fill in the blank" form in an attempt to "avoid probate." Even if attorneys are able to deliver higher-quality trusts, many still fail to fund them. This leads to the greatest challenge of all. After death, will the client's family be in a courtroom trying to resolve the estate or will it happen in your conference room? The worst part is, most attorneys don’t think they have a "fill in the blank" trust, because they have a document creation system from XYZ Estate Planning organization. Surely they know what they are doing!
The key to the answer will depend upon the terms of the trust created, and the integration of the financial assets into the plan to ensure probate is avoided and the full benefits of the trust are accomplished. Unfortunately, most advanced trust systems are nothing more than a higher-level "fill in the blank" trust and usually create around the attorney’s needs, not the client's. That inevitably leads to other challenges.
The next question in trust planning centers around the after-death provisions in a living trust. A lot of control and latitude can be provided to the family members of a decedent if the trust was properly drafted and funded. The specific powers you grant to the after-death trustees, in addition to the specific manner in which the assets can be distributed, can also have a significant impact. For example, a majority of practitioners still continue to deliver the trust assets to the beneficiaries outright after the death of the grantor. While this is simple, it requires a whole other estate planning endeavor for the beneficiary that didn’t have to happen. While that puts more money in the beneficiaries’ pocket, I am not sure it is the best way to meet the client’s overall goal.
Another strategy to consider while drafting revocable living trusts is to transfer the assets to a separate share asset protection trust for each of the beneficiaries. This assures that the client's ultimate goals of protecting their assets for their loved ones – and perhaps from their loved ones – can be achieved. Obviously this can’t be achieved in the "fill in the blank" trusts many lawyers use, and not easily in the lawyer-centered document systems.
Don't go it alone. Let Lawyers with Purpose help you sort this out in a systemized and organized fashion that includes the legal technical training, comprehensive customization of trusts and particular drafting available to accomplish the myriad needs of the clients’ overall planning strategy – and helps them sleep at night. Don't go it alone. Join us for the legal technical, practice management, and marketing strategies to be a comprehensive solution to your client.
If you're at all interested in joining Lawyers With Purpose and making 2016 your best year yet – we'd like to invite you to a webinar THIS FRIDAY, January 22nd at 2 EST. Register now for "How You Can Have the Business, the Income and the Life that You Once Dreamed About When You First Started Your Practice" and see how we can help you make it happen once and for all!
David J. Zumpano, Esq, CPA, Co-founder Lawyers With Purpose, Founder and Senior Partner of Estate Planning Law Center
Add a Comment