King & Wood, P.A.

Wyoming High Court Reviews "Challenge" to a Trust During Owner’s Lifetime

“Wyoming does not recognize an exception to enforceability of no-contest clauses, where a will contest is made in good faith.”

The Supreme Court of Wyoming recently reviewed a trust case involving an in terrorem clause or no-contest clause. It’s a term in a legal document that’s designed to threaten someone, usually with litigation or a penalty, for acting or to keep someone from acting.

In this case, a trust's in terrorem clause stated that any challenge made by or on behalf of the settlor's son or grandchildren would terminate any interest in the trust of any descendant, reports Leagle.com in the case of “EGW v. First Fed. Sav. Bank.”

The Appellants were the grandchildren of Mr. Willey, who created a revocable trust. They filed suit seeking to prevent the sale of land held in the trust. They challenged the court's grant of summary judgment in favor of the Appellees, a bank that was the successor trustee, and the beneficiaries of the trust. The district court determined that the Appellants were no longer beneficiaries of the trust, as a result of their father's 2014 lawsuit against Mr. Willey and his wife.

Among the issues that the Appellants presented was whether, as a matter of law, the Appellants' father's 2014 lawsuit challenged only the 2010 Trust Amendment, at a time when the in terrorem clause did not disqualify the Appellants.

In 2001, Allen Willey created a revocable trust that provided for the management of his assets during his lifetime and for distribution of the assets upon his death. A ranch was included as a trust asset. Mr. Willey served as the trustee of the trust during his lifetime, and the trust initially named his son Spencer as successor trustee. The trust ultimately benefitted Spencer's minor children, E.W. and A.W.

Mr. Willey amended the trust to add his wife's daughter and granddaughter as beneficiaries. In 2010, he made additional changes to the original trust, removing Spencer as beneficiary and successor trustee. The Appellants remained as beneficiaries.

In 2014, he amended the trust again and changed the successor trustee to a local bank. The charge also provided that under no circumstances, should Spencer or any lineal descendant of Mr. Willey be named trustee. The amendment also added an in terrorem, or "no-contest" clause, which is the subject of the case.

In 2013, Mr. Willey hired a real estate broker for to sell the ranch. Spencer filed for an injunction and Declaratory Judgment against Mr. Willey, individually and as trustee of the trust, and Mr. Willey's wife. Spencer sought to set aside the listing of the ranch and requested that Mr. Willey be removed as trustee due to incapacity. Spencer also alleged that Mrs. Willey had exercised undue influence over Mr. Willey and convinced him to sell the ranch, instead of leaving it in the trust. Spencer amended his claim to add that Mrs. Willey exercised undue influence over Mr. Willey by convincing him to remove Spencer from the trust, reduce the benefits to E.W. and A.W. and grant additional benefits to herself.

About a month after the Amended Complaint was filed, Mr. Willey died. The case went to trial, and the jury found that the trust amendments weren’t the product of undue influence. Spencer appealed, and the Wyoming Supreme Court affirmed.

As that appeal was pending, the Appellants filed this action through Spencer, who acted as "next friend" for his children. They sought an injunction preventing sale of the ranch, a judgment that the in terrorem clause wouldn’t apply to them, removal of the bank as trustee, and damages for the bank's alleged breach of fiduciary duties.

After a hearing, the district court granted summary judgment to the Appellees, determining that the Appellants' claims relating to Spencer's standing (right to bring a lawsuit) in the 2014 suit lacked support or authority. But the court said that Spencer had standing to challenge the trust in the 2014 action and that the challenge terminated E.W.'s and A.W.'s interest in the trust.

On appeal, the Appellants claimed that Spencer's 2014 suit could not have constituted a "challenge" to the trust, because the suit was filed during Mr. Willey's lifetime. Further, the Appellants assert that, because Mr. Willey did not remove them as beneficiaries after the 2014 suit was filed, he must have intended for the in terrorem provision not to apply. The Supreme Court of Wyoming didn’t agree.

Chief Justice E. James Burke wrote in his opinion that Wyoming doesn’t recognize an exception to enforceability of no-contest clauses, where a will contest is made in good faith. The Appellants also didn’t allege any changed circumstances between the time of the creation of the trust and Mr. Willey's death. The Court wasn’t persuaded that the 2014 suit couldn’t have constituted a challenge to the trust, because it was initiated during Mr. Willey's lifetime.

The Court was also not persuaded by the Appellants' claim that because Mr. Willey didn’t remove them as beneficiaries after the 2014 suit was filed, he must’ve intended for the in terrorem provision not to apply. Judge Burke said the Court must interpret the intent of the settlor, according to provisions contained in the trust.

"The rules of construction of a trust agreement are simple. A trust agreement is governed by the plain language contained in the four corners of the document,” he wrote, citing an earlier state supreme court case.

The case was affirmed.

Reference: Leagle.com (March 5, 2018) “EGW v. First Fed. Sav. Bank”

Ohio Prosecutor Says Criminals Preying on Seniors, Beware

“Butler County Prosecutor Mike Gmoser is warning scammers who prey on the elderly that they will be caught, and they will be imprisoned.”

The Journal-News reports in the article, “105-year-old woman trying to help grandson gets scammed out of $4,800,” that Butler County Prosecutor Mike Gmoser remarked that “When you steal from the elderly you are looking at a felony, we are going to pay attention to that.”

Assistant Prosecutor Gloria Sigman successfully prosecuted three scammers, a couple who scammed a 105-year-old grandmother out of $4,800 using a clone phone app and another man who beat up and stole from a 75-year-old woman.

One victim was 105-year-old Louise Limper. Her former caregiver Latisha Garrett and her boyfriend Eric Kleinholz scammed Limper out of $4,800, telling her that her grandson needed the money because his car broke down in Dayton, Gmoser said.

Kleinholz had downloaded an app that allowed him to use his phone, and cloned another phone number, which was Miss Limper’s actual grandson’s phone number, according to Oxford Detective Matt Blauvelt. When Miss Limper received the phone call on her caller ID, it appeared it had her grandson’s phone number on it.

The caregiver took Limper to the bank to get the cash. She told Limper she would mail the money but stole the cash instead, officials said. Detectives got Kleinholz to confess to his part in the scheme.

Kleinholz, an ex-con, was found guilty of identity theft and theft and was sentenced to three years in prison. This was a first offense for Garrett, but because she was in a “position of trust,” the judge was able to send her to prison for 18 months on the two felony counts of telecommunications fraud and theft.

The second case involved Randy Villani, 50, who attacked a 75-year-old woman and stole $1,000 from her. Villani did some odd jobs for the victim. However, he also convinced her to give him $300 he said he needed to get his sister out of jail and for his mother, who lives in the same trailer park, to buy groceries. Both turned out to be lies, according to police.

The last time he came to her house, he allegedly became violent and told her “If you call the police, I will come back and rape you and I will kill your husband.”

The victim’s daughter had just given her $1,000 for bills, medicine, and to repair her air conditioner. Villani took it and ran out, officials said. A jury found him guilty of aggravated burglary, robbery, aggravated menacing, and disrupting public service. Villani will be sentenced next month.

Gmoser commended the police in the county. He said that the Elder Abuse Task Force did a great job going after people who prey on the elderly.

Reference: (Liberty Township, OH) Journal-News (March 23, 2018) “105-year-old woman trying to help grandson gets scammed out of $4,800”

Does Medicare Cover Hearing Aids?

Medicare and most health insurance don't cover hearing aids, but alternatives, including some over-the-counter devices, can be less expensive.

Kiplinger’s recent article, “Medicare Doesn't Cover Hearing Aids but Retirees Have Options,” reminds us that hearing loss is so gradual, that you don't really recognize it until your hearing is impaired and it becomes quite bad. There's still a stigma attached for boomers about wearing hearing aids.

As people age, they often don't recognize hearing decline or seek treatment for it. It takes an average of seven to 10 years from the time someone recognizes he or she has a hearing loss, until they are open to getting help. Roughly 80% of adults who could use a hearing aid don't get one, according to a report by the National Academies of Sciences, Engineering and Medicine.

Baby boomers can be reticent to take even the first step of getting a hearing test. They view this as a sign of aging and fearing having to wear a big ugly plastic thing behind their ears, like their grandparents did. Hearing aids can also be expensive, as much as $3,000 per ear, and they aren't covered by Medicare or by other insurance plans.

It was welcome news for people with hearing loss, when Congress last August authorized the FDA to create a new class of hearing devices, which will be available over the counter—with a cost far less than what you pay for a device from the audiologist's office. The over-the-counter hearing aids are for adults with mild to moderate hearing loss and will be FDA-regulated. Certain hearing aids and other hearing wearable devices will soon be available in pharmacies and electronics retailers.

This can be confusing because some over-the-counter alternatives, sometimes called personal sound amplification products, are available now in stores. The quality and prices for the devices vary widely—some disposables sell for $20 to $30 per pair, while high-tech sound amplifiers cost several hundred dollars. However, these devices aren't considered medical devices or regulated by the FDA. Therefore, they can't be marketed as hearing aids or as a product to improve hearing loss, even with the new law.

The FDA has up to three years to write regulations and set safety and labeling rules for the authorized OTC devices. When the regulations are in place, expect lower prices for FDA-approved aids and more choices.

But don't wait to address your hearing health. Get tested. Here are some signs of when to consider having your hearing tested, according to the FDA:

• You hear better in one ear than the other.
• Folks say you’re shouting when you speak.
• You ask people to repeat themselves.
• Your spouse and kids say you watch television with the sound at full volume.
• You can’t hear a dripping faucet or high-pitched musical notes.

Reference: Kiplinger (March 3, 2018) “Medicare Doesn't Cover Hearing Aids but Retirees Have Options”

Is Your Advance Directive Up-to-Date?

“Paperwork, including a living will and health care power of attorney, can convey your treatment preferences, if you are ever unable to make medical decisions for yourself.”

While you may believe you’ve covered your bases by completing an advance directive detailing your preferences for end-of-life care, that may not be enough. You still need to make sure your family fully understands your wishes, updating your directive regularly and making the document easily accessible to those who need it.

Kiplinger’s recent article, “Advance Directive: Ensure End-of-Life Wishes Honored,” notes that many folks say, “My family knows what I want, so I’m covered.” But too frequently, that’s not the case.

If you haven’t drafted an advance directive or named a health care proxy, or your loved ones can’t locate it in an emergency, chances are good that your wishes won’t be honored.

If you don’t have an advance directive, create one now and share it.

An advance directive, which usually refers to a living will and a health care power of attorney, should state your preferences for medical treatment in an accident or at the end of your life. It should also designate an agent to make decisions on your behalf, if you’re incapacitated.

Make copies and give them to family members and your medical team. Keep your copies where they can be easily located.

Be certain that your loved ones are clear about your wishes and are willing to carry them out. Have a family conversation that includes as many people as possible, including adult grandchildren. Let them know your preferences, such as: Do you want to be kept alive on a ventilator? Are you willing to live in a nursing home?

Next, ask a trusted relative or friend to be your health care agent. Choose a person who can handle the responsibility and discuss it in depth.

Update your directive regularly and use the “five Ds”: a new decade of life, death of a family member, divorce, new diagnosis, or a medical decline, as events that should trigger an update of your documents.

Reference: Kiplinger (February 5, 2018) “Advance Directive: Ensure End-of-Life Wishes Honored”

Talking with Parents About Their Retirement Planning

“You should listen, do your homework, and remember whose money it is.”

A 2016 Fidelity study found that 38% of parents say they don't talk to their adult children about retiring, because the conversation never comes up.

Motley Fool says in its recent article, “3 Tips for Talking to Your Parents About Retirement,” that the importance of having retirement talks with your parents can't be overstated.

A Fidelity survey found that 93% of adult children and 95% of parents had greater peace of mind after having "any" detailed conversation about the parents' estate planning.

These conversations can be difficult, but here are a few ideas that may help when talking with parents.

Listen First. Some families still see conversations about money as taboo, and some parents may not think they need to discuss their finances with their adult kids. It is, therefore, important to listen to what your parents are saying when they do talk about the subject. Try to listen first and figure out what they want. Sometimes, they want input on their decisions. There are other times when they just want to let you know what decisions they've already made.

Research. If your parents talk to you about their retirement plans, it can be tempting to immediately offer your opinions. It’s quite possible that your parents and you need to do some more homework before finalizing any retirement plans or offering advice. It’s also possible that they have done a lot of research on their own.

It's Their Money, Not Yours. Remember that you can't dictate how your parents spend their money. If they want to blow their retirement savings on big vacations or assisting family members to their own detriment, it’s their decision.

This definitely gets more complicated, if you're the one who might end up financially supporting your parents as they get older. But you can't and shouldn't be trying to control your parents' financial decisions.

You should also have conversations with your parents about their estate plan. If they don’t already have wills and other estate planning documents in place, talk with them about making an appointment to see an estate planning attorney.

Reference: Motley Fool (March 31, 2018) “3 Tips for Talking to Your Parents About Retirement”

Estate Planning is Critical, Especially with the New Tax Law

“The recently passed “Tax Cuts and Jobs Act” (TCJA) contains a major change to the Federal estate tax laws – the doubling of the individual estate gift and GST tax exemptions to approximately $11.2 million (double this for couples).”

The new tax law will greatly decreases the number of people who will be subject to the federal estate tax. This does not mean you don’t need an estate plan. In fact, you need to review your plan now.

Forbes’ recent article, “7 Reasons To Revisit Your Estate Plan, Trump Tax Law Aside,” says that even if one’s estate is unlikely to be subject to federal estate taxes, there still are several non-tax reasons to revisit estate planning and possibly update your prior documents.

The disposition of your assets. Even with a revocable trust in place, a will often serves as the primary means for communicating your wishes. The provisions of a will can state how assets will be transferred, which can include an outright transfer to beneficiaries; to an existing trust (inter vivos trust) or into a new trust that will be created under the provisions of the will (testamentary trust). A testamentary trust in a will can specify the ages of beneficiaries or other terms that determine when beneficiaries will receive assets. Wills also contain specific bequests of financial and nonfinancial assets, like family heirlooms. In addition, charities are often named as recipients of bequests.

Administration and financial management. When a person passes away, an estate is created. The person or institution managing the affairs of the estate is the executor or personal representative, who is tasked with the taking care of the decedent’s assets and liabilities, working with the probate courts, and disposing of the assets in accordance with the will.

Guardianship for children. If an individual has minor or disabled children, the will must designate your choice of a guardian and a successor guardian.

Trusts. Trusts give the creator some level of control over assets and their use through distributions. This can be especially important when leaving assets to those with financial issues, a person with a disability or an addiction, or a financially unsophisticated spouse. Trusts can also shield assets from divorce and the claims of creditors and predators. There are many types of trusts. An experienced estate planning attorney will be able to help you to select the right kind of trust and make sure they are set up correctly.

Other Estate Planning Documents. In addition to the will, an individual should have a health care proxy, health care directives (living will) and a general durable power of attorney over financial matters. One additional document is a letter of intentions.

Taxes. With “portability,” a vehicle that lets any unused credit from the first spouse to die pass to the surviving spouse to use, your current estate plan should be revisited. Consider state estate tax provisions that do not follow the federal tax, which could result in no federal estate taxes, but still a significant state tax.

Gifting. The ability to make lifetime gifts has also doubled. Gifting has many tax savings opportunities.  However, it can also create complications from the impact of the gifts on the recipient. Work with an attorney for any sizable gifts.

Even though the new tax law has greatly reduced or eliminated the potential estate tax liability by the doubling of the lifetime estate and gift tax exemption, it hasn’t reduced the need for thoughtful and proactive estate planning.

Reference: Forbes (March 15, 2018) “7 Reasons To Revisit Your Estate Plan, Trump Tax Law Aside”

Texas Court of Appeals Examines Effect of Mediated Family Settlement Agreement on Probate Claims

“Appellees answered Appellant's petition by asserting that his claims had no legal or factual basis because the acts that he alleged, occurred prior to the execution of the family settlement agreement.”

Judge John M. Bailey of the Court of Appeals of Texas recently wrote the opinion in the Court’s decision in the case of “In the Estate of Mathis,” which involved a dispute arising from mediated family settlement agreement.

Michael Mathis appealed a decision from a contested probate proceeding that was resolved by a mediated family settlement agreement and mutual release. The decedent, Richard E. Mathis, Jr., died in 2014. Appellees Richard V. Mathis and Betty Mathis filed an application to probate a will executed by the decedent. Jody Jent filed an opposition to Appellee's application to probate the 2012 will.

The parties executing the Mediated Family Settlement Agreement and Mutual Release consisted of Appellee, Jent, and Appellant. They executed the family settlement agreement in October 2015. The parties agreed that the 2012 will would be admitted to probate "without opposition in any form by [Jent] or by [Appellant]." The family settlement agreement also set out an agreed disposition of the decedent's estate. The parties agreed in the family settlement agreement to release any and all claims and causes of action between them or involving the decedent "from the beginning of time through the date of the execution of this Agreement."

Pursuant to the family settlement agreement, the trial judge admitted the 2012 will to probate and appointed Appellee as the executor of the decedent's estate.

In March of 2016, Appellant filed a petition claiming that Appellee fraudulently procured the probate of the 2012 will—the same will that was admitted to probate pursuant to the family settlement agreement. He argued that the 2012 will was invalid "because the creation of the Will was the result of a criminal conspiracy, and became fraud, conspiracy, conspiracy to defraud, perjury, fraud on the Court, Theft, passing a fraudulent document to a Government agency and other unnamed crimes."

Appellant also complained about a final report of the estate filed by the Appellee, charging him with numerous crimes, lying to the court and in his deposition, and that he had taken advantage of the decedent. Appellant also alleged several matters occurring in a guardianship proceeding involving the decedent. Appellant alleged that several other individuals conspired with Appellee in committing these acts.

Appellees responded by asserting that his claims had no legal or factual basis because the acts that he alleged, occurred prior to the execution of the family settlement agreement and that all his claims were released in the agreement.

Shortly after this, Appellant declared that he revoked the family settlement agreement "for cause."

The trial court advised Appellant that his attempt to unilaterally rescind the family settlement agreement, simply by filing a notice to rescind it, was invalid. The trial court further advised Appellant that the trial court had entered an order approving the family settlement agreement. The trial court advised the parties that it was going to grant Appellees' motion to dismiss. The trial court warned Appellant that, if he filed future motions, he could be ordered to pay attorney's fees in the future.

On appeal, Appellant claimed that the trial court ignored his motion to remove the executor. He asserts in his first issue that the trial court erred in "not filing" this motion. In presenting this issue, Appellant said the trial court erred in stating that it would not consider various motions he had filed, because they were based on the allegation that the family settlement agreement was not valid.

Judge Bailey noted that all Appellant's issues were related because they all have the same operative fact—that the family settlement agreement precluded Appellant from attempting to remove Appellee as the independent executor or suing Appellees for damages.

Appellees argued that all the alleged facts and alleged misconduct occurred prior to Appellant's execution of the family settlement agreement. They said all his claims had no basis in law, because they were released in the family settlement agreement. The Court of Appeals reviewed Appellant's petition and agreed that the facts alleged in the petition predate the execution of the family settlement agreement.

In his petition, Appellant didn’t seek the revocation of the family settlement agreement, but rather, asked for monetary damages from Appellees. Without a claim asking the trial court to revoke the settlement agreement, Appellant's petition didn’t have a basis in law. Accordingly, the trial court didn’t err in granting Appellees' motion to dismiss.

The resolution of Appellant's fourth issue also settled the other claims, because his attempts to remove Appellee as the independent executor was also precluded by the family settlement agreement. The judgment of the trial court was affirmed in dismissing Appellant's claims.

Reference: Justia (March 15, 2018) “In the Estate of Mathis”

Caring for Mom and Dad from Far Away

“The best approach to dealing with long-distance caregiving is to educate yourself and your family to prepare ahead of time.”

It’s not uncommon for families and friends to be separated by many miles and even many time zones. Even so, at some point in their lives, parents, grandparents or a loved one may require in-home care.

Flagstaff Business News’ recent article, “How to Care for Loved Ones from Miles Away” reminds us that you could suddenly be faced with the challenge of long-distance caregiving.

Institutional Facilities or Care at Home. In some instances, nursing homes and retirement homes appear to be the only options available for care. However, the elderly can suffer significant emotional trauma when leaving their long-time homes and familiar surroundings. Research has shown that they do better, when they stay in their homes and familiar communities with friends and neighbors.

Finding a Home Care Agency. They offer different levels of service, so you can select an agency that offers more than basic homemaker services. Eventually, your parent may need personal care services. The agency you select should be bonded, insured, and licensed (although not all states require home care licensing). Caregivers should be experienced and vetted with at least a basic criminal background check. You should meet with the caregiver, before you agree to services. It is also important to choose an agency that complies with HIPAA.

Affording the Care Required. Since home care services are non-medical, they aren’t covered by Medicare. Home care services are generally paid individually or by long-term care insurance (LTC).

One solution to covering these costs is a reverse mortgage, which lets your parent access funds from their home equity, without disturbing their income. In addition, eligible veterans and their spouses may qualify for the Disability Pension for Aid and Attendance. That program provides funds for in-home care.

If you are still undecided on whether a loved one needs care, consider these questions to help you make a decision:

• Does your parent need help walking?
• Has his or her physical and/or emotional health been declining?
• Is he or she able to prepare nutritious daily meals?
• Can your loved one get out and shop at a store?
• Can he or she manage bills and financial responsibilities?
• Is he or she taking medications on time?
• Can your parent drive safely?
• Is he or she in need of companionship?
• Does he or she need help dressing or grooming?

Long-distance management of a parents care can be exhausting. Try to get help from other family members. If your parent is suffering from a specific illness like Alzheimer’s, ALS, or a stroke, contact the local association/support group.

You should also use the services of a care manager and an experienced elder law attorney. Most importantly, stay in touch with your loved one and his or her support group.

Reference: Flagstaff Business News (March 18, 2018) “How to Care for Loved Ones from Miles Away”

Are Contingent Beneficiaries Subject to Inheritance Tax on Life Insurance?

“The inheritance tax is determined by the relationship between the deceased and the beneficiary…”

Let’s say that you and your spouse both have life insurance policies of $500,000 on each other and have no children. Each spouse is named as the primary beneficiary on the other's policies, and the contingent beneficiaries are a brother and a niece. The issue that’s often raised, is whether the brother and the niece would be subject to the inheritance tax, if they received the proceeds.

nj.com asked and answered this very question in its recent article, “Do the beneficiaries of life insurance have to pay inheritance tax?” Although New Jersey’s state estate tax is gone, there’s still an inheritance tax.

Life insurance—when paid to a named beneficiary or a trust for the benefit of a named beneficiary—is a specific asset that’s exempt from New Jersey’s inheritance tax, despite the relationship of the beneficiary to the decedent.

If the life insurance was left to the owner’s estate, and the estate was passed to the brother and niece under the will, it wouldn’t be exempt from the inheritance tax. It wouldn’t matter that the brother and niece were named as contingent beneficiaries on the life insurance policies, so long as they were named as beneficiaries on the policy and wouldn’t be taking the proceeds as beneficiaries under the will.

The New Jersey inheritance tax is imposed on certain bequests based on the relationship between the deceased and the beneficiary, and the value and nature of the asset transferred. The tax is also levied on transfers within three years of death.

There is no inheritance tax imposed, if the beneficiary is a spouse, domestic partner, civil union partner, grandparent, parent, descendant, stepchild of the decedent, or a charity. If the beneficiary is in one of these categories, the value or nature of the bequest doesn’t matter. If the beneficiary does not fall within one of these categories, then the relationship to the beneficiary and the value or nature of the bequest will be considered to see if there is an inheritance tax.

Transfers to a sibling, son-in-law or daughter-in-law (“Class C” beneficiaries) aren’t taxable up to the first $25,000. Transfers in excess of that to $1.1 million are taxable at 11%. Transfers in excess of $1.1 million and up to $1.4 million are taxed at 13%, and transfers over $1.4 million up to $1.7 million are taxed at 14%. Any larger transfers are taxed at 16%.

All other beneficiaries are referred to as “Class D” beneficiaries. Transfers to these beneficiaries are taxed at 15% if the value is greater than $500 up to $700,000 and at 16 % for anything valued higher. In addition to life insurance paid directly to a named beneficiary, certain other assets, like public employee benefits are exempt from the tax.

Reference: nj.com (March 26, 2018) “Do the beneficiaries of life insurance have to pay inheritance tax?”

Ask Your Estate Planning Attorney About a Trust

“Everyone needs a will, but, increasingly, estate planners say people could benefit from setting up a trust, while they are alive.”

Creating a trust can help assure that assets are distributed more quickly, bills are paid promptly and continuously and personal information about property and other assets remains private.

The New York Times recently published an article, “Life After Your Death? Here’s Why You Should Have a Trust.” The article explained that trusts have often been thought of a way for wealthy people to dispose of their assets.

However, some trusts can be useful for those who are not ultra wealthy. One of those is a revocable trust, which can be changed during a person’s lifetime. A properly funded revocable trust can avoid the need for probate after death.

If assets that have been titled in one name, are retitled in the name of the trust, the payment of any bills will continue without interruption in the individual’s lifetime. This can work in any situation, where financial support is given to family members.

Unlike an irrevocable trust, where assets are dispersed with more permanency, a revocable trust can be changed during the holder’s lifetime, if she decides to handle her assets differently.

If that person’s financial situation changes or if she believes that she’s made a mistake, she can close the trust and void the arrangement.

The trust is similar to a will but is more private.  It isn’t subject to outside review or approval. A will may need court approval, and every state has its own probate laws.

When you select a trustee, make sure the person has the time and desire to take on the responsibilities of being a trustee. Irrevocable trusts are often used for tax planning, but revocable trusts are really used for life planning.

Reference: The New York Times (March 22, 2018) “Life After Your Death? Here’s Why You Should Have a Trust”