Tag Archives: Trust

Bleak House

Bleak House Jarndyce

“There are two motives for reading a book; one, that you enjoy it; the other, that you can boast about it.” -Bertrand Russell

As both a lover of great literature and a probate lawyer, I put Bleak House by Charles Dickens on my “to read” list years ago. My father had mentioned it to me several times, noting with amusement that the estate lawsuit at the heart of the novel didn’t end until the money ran out. At 989 pages, it’s not what you’d call a weekend read, but I finally hunkered down and plowed through it. While it is anything but a positive reflection on lawyers and the legal system of nineteenth century England, it is wicked funny and a great read. (Plus, I can boast about it.) G.K. Chesterton is quoted on the back cover as saying it was “Perhaps his best novel…when Dickens wrote Bleak House he had grown up.”

The novel opens on the fog that engulfs the Chancery Court in London where probate cases were adjudicated. The case of Jarndyce and Jarndyce has been in probate for generations; people literally are born into the suit and die before it is resolved. Dickens is pretty vague about the particulars of the case. One character tells us, “‘Why, yes, it was about a Will when it was about anything. A certain Jarndyce, in an evil hour, made a great fortune, and made a great Will. In the question how the trusts under that Will are to be administered, the fortune left by the Will is squandered away; the legatees under the Will are reduced to such a miserable condition that they would be sufficiently punished, if they had committed an enormous crime in having money left them; and the Will itself is made a dead letter.”

Many of the novel’s characters are beneficiaries under the will and spend their lives waiting for the lawsuit to be resolved. One unfortunate young man, Richard, drives himself to an early grave in his obsession to see the suit completed. Miss Flyte, another beneficiary, keeps a series of birds locked up in a cage, intending to let them free when she is free of the lawsuit and receives her inheritance.

Dickens is merciless about the purpose of all the delay: “The one great principle of the English law is, to make business for itself. There is no other principle distinctly, certainly, and consistently maintained through all its narrow turnings. Viewed by this light it becomes a coherent scheme, and not the monstrous maze the laity are apt to think it. Let them but once clearly perceive that its grand principle is to make business for itself at their expense, and surely they will cease to grumble.” Thus, as one character dryly remarks, “Equity sends questions to Law, Law sends questions back to Equity; Law finds it can’t do this, Equity finds it can’t do that; neither can so much as say it can’t do anything, without this solicitor instructing and this counsel appearing for A, and that solicitor instructing and that counsel appearing for B; and so on through the whole alphabet, like the history of the Apple Pie.”

Let’s just say it will not endear you to lawyers or the legal system; but mercifully, the 21st century American probate court little resembles its 19th century English counterpart. Our system is geared toward the timely resolution of disputes; and to the extent it fails, I have found that it is generally because angry litigants—not courts—want to use the legal system to wage Pyrrhic battles.

While the lawsuit in Bleak House forms the backdrop of the case, and gives Dickens the opportunity to train his savage wit on the English legal system, the heart of the story is not really about the lawsuit itself. Bleak House offers a wonderful panorama of characters and richly interwoven plots and subplots. It is partly narrated by Esther Summerson, one of the main characters, an orphan whose family origins are shrouded in mystery. It features unforgettable characters such as Lady Dedlock, the proud and aristocratic wife of Sir Leister Dedlock, who harbors a painful secret; Mr. Tulkinghorn, Sir Leister’s scheming lawyer who spends much of the novel hot on the tracks of Lady Dedlock’s secret, and whose death late in the narrative briefly turns the novel into a murder mystery; and Mr. Skimpole, the financially improvident rascal who remorselessly sponges off others while feigning a child-like innocence about the ways of the world.

Bleak House is well worth putting on your bucket list. And if you don’t want to invest the time reading it, I am informed that it was turned into a brilliant mini-series by BBC, though I have not seen it—yet. I’m putting it on my “to watch” list.

Heggstad Petitions in Nevada: Or, How to Bypass Probate and Get an Asset into a Trust after Death

Washoe Co. Court House

It is unfortunately all too common that clients who set up a trust forget to transfer one or more assets into the trust; or they purchase a new home or other asset, and do not title it in the trust. In some cases, it is possible to avoid having to probate assets omitted from the trust if you can prove that the deceased intended to include that asset in his trust. In Nevada, this can be accomplished by way of filing a Heggstad petition with the probate court.

The name of the petition comes from a 1993 California case, In Re Estate of Heggstad, in which Mr. Heggstad created a trust but failed to execute the necessary paperwork to transfer his interest in certain real property into his trust. The successor trustee argued that Mr. Heggstad had intended that the asset be transferred to the trust by the fact that it was included in the schedule of assets attached to the trust. The court agreed, finding that that a written declaration of trust by the owner of real property, in which he names himself trustee, is sufficient to create a trust in that property; the law does not require a separate deed transferring the property to the trust.

In Nevada, the Heggstad case is not binding law, but a Heggstad type petition is provided for in the probate code, which allows a trustee or other interested person to petition the court to enter an order if the trustee has a claim to property and another holds title to or is in possession of the property. Pursuant to Nevada law, an omitted asset can be placed into the trust without a probate proceeding.

Under what circumstances will this be successful? You have to prove that the asset was intended to be in the trust. Inclusion of the asset on the schedule of assets was deemed sufficient in the Heggstad case. Another possibility is to show that the asset was in the trust but was inadvertently removed for some reason; for example, you had a bank account at First Bank titled in your trust and closed it and opened a new account with the money at Second Bank, but forgot to open the new account in the name of the trust. Each situation is different, but a knowledgeable probate attorney can help you evaluate your case.

In order to put the asset back in the trust, it is necessary to prepare and file a petition in the appropriate district court. The petition is set for a hearing and if approved, the court will issue an order transferring the assets into the trust without any further proceedings. This is a huge advantage over opening a probate estate as it cuts down significantly on the time required and on fees and costs.

Contact Woodburn and Wedge with your trust and estate issues. We can help you evaluate whether a Heggstad petition would work for your situation or whether another procedure is appropriate.

Talking to Heirs About Their Inheritance

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Do your heirs know how much they stand to inherit from you?  Have you ever received an unexpected inheritance?  Many clients debate how they should notify their heirs of the amount and extent of the expected inheritance.  On April 22, 2013, the Wall Street Journal published an aptly-titled article “The Inheritance Conversation. Ugh.”  Many fear the inheritance topic and avoid the subject just as they avoid adequate estate planning.  However, there are practical steps you can take to assure that your heirs are prepared for the receipt of assets and property.

Most recognize the importance of preparing and disclosing information about inheritance to their heirs, yet few take the time properly prepare their heirs.  Children should not receive much financial information until they reach their 20s.  While certain teenagers may be precocious and able to comprehend the value of a dollar, clients must be cautious to avoid undermining their work ethic. Simply telling children how much they stand to inherit can weaken the determination of even the most capable individuals.

Importantly, children of wealthy parents will not learn financial management by osmosis.  Parents must take an active role in educating and informing their children about financial planning and management.  Several advisors recommend a mentorship whereby the heirs are given an opportunity to manage a smaller portion of the assets.  As the heirs gain in knowledge and ability the children or others can be given more knowledge of the family’s wealth.

One crucial element is requiring heirs to secure and maintain jobs.  With their earnings, the heirs can be instructed on the importance of saving and sharing their assets. Most successful wealth transfers occur where children have learned the value of work and wages earned.

I continually remind clients that their best laid plans can be undone by unexpected health concerns or other financial catastrophes (see the most recent recession).  For those who have a revocable living trust, I urge them to remind their children that the children’s shares are not fixed and can be altered.  No one should expect or rely upon a set amount of money or assets passing to them.

Simply start with a basic conversation with family members and other heirs.  Avoiding this topic can cause confusion, mistrust and leave heirs unprepared to manage the family’s wealth.  For those who need assistance in this process, our office is experienced in wealth transfer planning.

To Do List Upon Death of Family Member

The October 2012 issue of Consumer Reports highlights numerous steps one can take upon the passing of a family member or loved one.  Among the listed items, some steps are overlooked and cause greater anguish and financial difficulty for those who survive the decedent.

Consultation

While many employers receive word that an employee has passed, few surviving family members contact human resources or employe benefits coordinators.  Employer specialists can quickly begin the process of obtaining benefits and providing any pay due.  Certain financial institutions “drag their feet” when it comes time to pay out benefits so starting the pay-out process sooner is always beneficial.

Many family members fail to look for prepaid burial plans or other arrangements made by the decedent during lifetime.  If the decedent already paid for funeral services, the mortuary will pick-up the body and assist the family members with the completion of vital tasks. The mortuary or funeral home will help obtain death certificates and can assist in the coordination of the memorial or funeral service. As with many industries, the costs of these services have risen such that a prepaid plan can result in significant savings.

Hopefully, you are well aware of your loved ones’ wishes such that you will know whether a prepaid plan is in effect.  If not, you should at least know where the decedent kept important documents such as a trust, will, and financial documents.  If you have no idea where such important information is kept by your loved one, you should discuss the matter soon.  For assistance discussing these sensitive matters, you can contact an estate planning attorney today.

Jason C. Morris, Esq.

Joe Paterno’s Will Reveals Little More Than Revocable Living Trust

Today, closing arguments are being held in the jury trial of accused sex offender Jerry Sandusky.  His former boss, legendary Penn State football coach Joe Paterno, has created intrigue in an unrelated legal matter.  Paterno’s family sought court protection to seal Paterno’s will from public disclosure. After a local newspaper filed a motion to unseal the will, Paterno’s family made public his 1997 will and 2010 codicil to the will.

ImageAfter reviewing the contents to the will and the codicil, there is nothing surprising or notable about their contents.  The family’s efforts to seal the testamentary documents seem unreasonable and misguided.  Typically, wills must be lodged with the county court or probate department before the decedent’s assets may be distributed.  Paterno’s will is a pour-over will meaning it directs any probate assets to be poured over to a revocable living trust.  Most likely, the Paterno revocable living trust specifies the distribution of Paterno’s assets.

A revocable living trust is advantageous because you do not need to lodge the trust with the court.  The administration of the trust and distribution of the estate can take place outside of public review and records.  In addition, with advances in medicine and technology, individuals are living beyond their ability to manage their financial affairs.  Revocable living trusts allow successor trustees to take over and manage the financial affairs of those suffering from diminished capacity.

Living trusts are only effective insofar as you title the assets properly.  Your assets should be titled in the name of the trust.  The Paterno will, a pour-over will, acts as a backstop in the event that an asset is not titled properly in the name of the trust.   Any asset that is not transferred into a living trust must pass through probate first prior to its distribution.  Oddly, the Paterno family has not filed a petition to initiate a probate of any assets.  The family efforts to seal the will and codicil appear unnecessary and unusual. As with the Sandusky trial, the Paterno will story may end this week. Or, future court proceedings may loom ahead.