Do You Need Trust Litigation Assistance?

A trust is a key estate planning resource for all individuals. Since money, property, and other assets are usually involved, disputes can occur that will often result in litigation. You may need legal representation in various trust litigation matters. These kind of trust litigation matters can include the breach of fiduciary duty, concerns about the trust being legitimate, or the trustee mismanaging the trust.

Since trust litigation can be complicated, you will need to have a trust litigation attorney who has the necessary knowledge and experience to protect your rights. Basic construction of a trust includes:

  • The donor, grantor, or settlor establishing a trust. This can typically be done through trust agreement, a last will and testament, or another kind of legal document.
  • A beneficiary is named. There can be more than one beneficiary.
  • The trustee agrees to hold money, property, or other assets for the benefit of someone else.
  • The trustee holds and manages the principal of the trust.

There are numerous reasons why someone’s estate plan will be held entirely, or partially, in a trust. Many times, a trust’s assets will not pass through probate. A trust can give someone more privacy and discretion. Although there are several other benefits of having a trust, in the end, people may still find themselves having disagreements related to the trust.

Many times a trust can be litigated for the following reasons:

  • There are various estate planning documents that are competing with each other
  • Oral promises were made, but those promises are not shown in the trust
  • The original estate planning documents cannot be found

While honest mistakes can be made, often times less than honest actions take place. Whatever the reasons may be for the disagreements or disputes, we are dedicated to helping you. If you would like to schedule a consultation, contact us for information.

Ways To Avoid Trust Litigation To Keep Peace In The Family

Going through trust litigation after someone they love has passed away is not something that people will look forward to. This process can cause relatives to go at each other’s throats, and this can be highly stressful. No one wants to have to deal with arguments and disagreements, especially when you are going through one of the most difficult times in your life. You are already dealing with a loss; how can you make sure there are no family feuds over an estate?

Have Legal Documents

All of your estate planning and trust documents should be properly prepared. Sometimes a litigation happens because the documents were not prepared and drafted properly. If anyone has any major concerns about someone contesting the documents, then the documents should not be drafted alone. The documents should be customized so there will be no confusion or ambiguity.

Be Sure To Update Your Documents

If you have documents that are old or you have neglected to make significant changes when necessary, you can be setting your family up for major troubles. Your legal documents should be up to date because there will likely not be anything for anyone to contest or be uncertain about. If you need to update the beneficiaries on your life insurance policies, you should do that as soon as possible. If you have divorced and you have not made any updates to your insurance policies, then your ex-husband or ex-wife will still be listed as the beneficiary.

Everyone Needs To Communicate

Litigation typically happens because someone who may have been part of a will or an estate is no longer part of it. People will usually find out that they were either disinherited or they will find out they will not receive what they believed they were supposed to receive. If a family wants to avoid arguments or fights after a death, everything should be talked about ahead of time, before death happens. No one wants to be shocked or surprised by the things they have been told about the trust or estate.

When you take the necessary time to use the advice above, your estate planning can be the difference in keeping your family together or breaking them apart after you have gone. If you would like a consultation to discuss this, contact us.

For People with Firearms: A Look into Gun Trusts in Estate Planning

If you own any firearms, one of the questions you’ll need to address is how to include them legally in your estate.

You might have only one or two guns, or maybe it’s a larger collection. Regardless, there are legal issues with transferring these to your beneficiaries in the event of your incapacitation or death. For example, you might have beneficiaries who can’t legally own or operate firearms. But even if they are eligible, there are still restrictions and a transfer process that need attention and care. You or your beneficiaries could face serious criminal charges if you don’t account for the legal issues.

The role of gun trusts

As discussed in a recent article from Investment News, gun trusts can facilitate the legal transfer of firearms from one individual to another (they might also make the process of purchasing firearms go a little more smoothly, as the trust itself can serve as the entity that buys the firearms). By using the trust, you often don’t need as much paperwork or as many steps towards making the transfer from one gun owner to another.

When it comes to establishing a gun trust, you need to work with attorneys who understand estate law and the relevant state and federal laws for gun ownership, transfers, and sales. For example, even if you live in Texas, you might want to leave one of your guns to a family member who lives in Oregon or Utah. What are the legalities of transferring a gun across state lines? What are the gun laws for those states? (For instance, are certain types of firearms and ammunition illegal in another state?)

The trust document itself can lay out specific guidelines and restrictions for trustees and beneficiaries, so that they’re less likely to accidentally break the law.

Another important point from the Investment News article is that even if you decide not to transfer your firearms, you can make provisions in a trust for their legal sale, with the money going to your beneficiaries.

If you have any questions about this issue, don’t hesitate to contact us. With legal guidance, you can make informed decisions about what to do with your firearms while complying with all the legalities.

The Trouble With Trustees

The November 22-23 weekend investor section of The Wall Street Journal includes  an article entitled “The Trouble with Trustees,” which is a lengthy article discussing how both trustees and beneficiaries of a trust can manage the delicate relationship that can be strained when they clash over how to invest and/or spend the trust’s money.

A Trust is established by one person for the benefit of another person(s), but rather than giving the money outright to the beneficiary, the person creating the trust asks a third party (the trustee) to hold the money or property for the benefit of the beneficiary(ies).  The trust’s creator has considerable flexibility in controlling the terms of the trust and how the trustee should manage, invest, and/or distribute the Trust’s assets and income.

Not surprisingly, the Trust’s beneficiaries can often disagree with the trustee’s decisions.  For instance, when the beneficiary asks the trustee for a new Porsche but the trustee decides that a more economical Honda should suffice, a clash may occur between the beneficiary and the trustee over which car should be purchased.

Ford + Bergner has represented countless clients in disputes over trusts.  Below is a sample of the types of disagreements that arise between trustees and beneficiaries:

1.    Disagreement over the trustee’s accounting for the assets and income.

2.    Disagreement over the way that the trustee has invested the trust’s assets.

3.    Disagreement over how the income is divided between the multiple beneficiaries of the Trust.

4.    Disagreement over how much of the income/assets should be distributed in a particular year.

The Wall Street Journal article encourages trust beneficiaries to regularly review the accounting provided by the trustees.  It also suggests that the beneficiaries should regularly stay in contact with the trustee and keep notes from those conversations.  For trustees, maintaining accurate and complete financial records is important, and the prudent trustee should always treat the trust beneficiaries with respect, regardless of the request.

If you are either the trustee or the beneficiary of a trust and find that you are in a dispute over the Trust, the attorneys at Ford + Bergner will be happy to assist you.

Trust Litigation for Undue Influence: Dealing with Coersion of Kids on a Parent

Trust litigation can be a challenging process when it involves family members attempting to gain a trust without consent of others in the family. This can be a scenario that’s devastating to you if you have a sibling who’s done this without letting you know as means of gaining access to a parent’s assets. It’s a situation we’ve seen many times with our clients at Ford + Bergner LLP, and we can help you through similar situations.

But different scenarios might arise when this happens that could create complex legal territory to tread on. It’s why you should always handle trust litigation through an experienced lawyer who has years of experience dealing with estate issues like guardianship, probate, or trusts.

What Are Typical Scenarios in Undue Influence?

Most typically, it’s a brother, sister, or other relative who happens to be taking care of an aging parent who convinces the parent to execute a trust. They may convince the parent that they deserve complete control of all assets since they’re putting in full-time as a personal caretaker. This may not necessarily be done willfully by the parent if it’s common knowledge that the parent is suffering from senility.

In this scenario, there could be some kind of threat by the sibling against the parent if they don’t start the trust. We’ve seen cases where this is proven, and it’s never pleasant. However, the parent might have done it so they could continue to have the sibling care for them. In those threat instances, the sibling might threaten to walk away as caregiver if the parent doesn’t start a trust in their name.

Proving these cases requires considerable evidence and legal preparation by us. We’ll help determine if that trust in question can be challenged under a specific category. While undue influence is one, we can also challenge a trust based on fraud, ones created while under duress, or based squarely on the parent not being mentally fit.

Contact us at Ford + Bergner LLP so we can help you if you think a trust started by a sibling should be challenged due to undue influence. We’ll help you step by step through the process by acquiring the proper evidence so you have a strong case.

The Advantages of Educational Trusts

Creating a trust when your child or grandchild is small is a good way to build up money for the child’s future educational expenses. But there are a number of other benefits involved with educational trusts, as well. Here are a few.

  • You don’t have to pay a gift tax. If you have a properly set up Crummy Trust, in which each beneficiary has the right to withdraw a certain portion of the gift within thirty days, individuals can give away up to $14,000 per year without paying gift taxes on it. Because the trust can be funded with the gift exclusion amount, you won’t incur any gift taxes on it. The interest and dividends from it are also exempt.
  • Educational trusts can be protected from liability. By including Spendthrift Provisions in the language of the trust agreements, the money can’t be taken by creditors as payment for noneducational expenses.
  •  There are further tax benefits. Contributions to an educational trust are no longer included as part of the grantor’s estate and, therefore, are not subject to estate taxes. In particular, educational trust help those individuals with sizable estates to pass their assets to future generations without an estate tax being involved.

While the main benefit of an educational trust, of course, is raising the money for a child’s educational expenses, this form of trust is often included in a comprehensive estate plan. It is important that your trust be set up in accordance to Spendthrift and Crummy guidelines so that you and your loved ones will receive the maximum benefit. For more information on this and other types of trusts, contact us.

The Most Important Party in Trusts

There are many situations in which a trust would be the best option to leave money and other assets behind for children and other family members. In the case of an accident or sudden death, a trust can protect a grantor’s assets from creditors. In addition, a trustee can later preserve and manage those benefits so that the beneficiary received them in a prudent fashion.

Now, in all the terms mentioned above, which would most likely be the “X factor” in a trust agreement? It’s not the grantor, since he’s the one who chose to open a trust in the first place. And it’s probably not the beneficiary, as he was likely always lined up to receive the grantor’s assets.

All that leaves the trustee to being perhaps the most important party of a trust. The legal definition of “trustee” is: “The person designated in the Trust Agreement to take possession of the trust assets and manage those assets. He must also preserve and manage the assets according to the provisions in the Trust agreement.”

The trustee is so important because he needs to abide by the trust agreement and protect and distribute the assets accordingly. This job can be a bit more time-consuming than people give it credit for. There’s a whole lot of paperwork and billing associated with the task. Throw in familial issues such as physical custody and it could suddenly turn into a full-time job.

And that’s exactly why grantors should consider an impartial trustee out of the family. For one, it would make issues much less complicated concerning the distribution of assets. Grantors typically turn to a family member for a trustee, but there’s no guarantee that he has a family member both willingly and capable to do the job.

Professional consulting can help grantor’s pick a reliable and capable trustee. We understand the process and want to help people leave behind their assets exactly as they wish.

If you would like more information about trusts, contact us.