Tag Archives: Trust

Talking to Heirs About Their Inheritance


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.Image 

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. 

Don L. Ross Presents at “It’s Your Estate” Seminars

KNPB Channel 5 and the Community Foundation of Western Nevada, along with 10 other non-profit sponsors, present a series of free, in-depth workshops on estate planning and family financial planning, “It’s Your Estate.”

Don L. Ross, Esq., will present on advanced estate planning topics including AB trusts, life insurance trusts, and grantor retained annuity trusts.  Don will present at the following times and locations:

Tuesday, April 26, 2011, 11:00 a.m. at the North Valleys Library, 1075 North Hills Blvd #340, Reno.

Wednesday, April 27, 2011, 2:00 p.m.  at the Spanish Springs Library, 7100 Pyramid Highway, Sparks.

Thursday, April 28th, 2011, 3:00 p.m. at the South Valleys Library, 15650A Wedge Parkway, Reno.

You can call Sandy at the Community Foundation 775-333-5499 to reserve your spot at the class location of your choice!

Divorce Forfeiture Provisions in a Will or Trust

A forfeiture provision may be drafted such that a couple must remain married in order for both spouses to receive distributions or withdrawals from the estate. Such a provision would not be invalid because the provision does not encourage divorce or disrupt the family relations. None of the Restatements of Law, which are legal treatises, prohibit forfeiture provisions upon divorce. In fact, some states allow reasonable restrictions upon remarriage of a surviving spouse.

Certain provisions in a will or trust may be held invalid on the basis that they would disrupt family relations. For example, a provision which provides for the payment of money to a beneficiary if he divorces or separates from a spouse may be invalid. Similarly, a provision which prohibits distributions to a beneficiary if he does not divorce or separate from a spouse may be invalid. Also, a provision cannot deny a bequest until a beneficiary’s spouse dies or the beneficiary divorces his spouse. Likewise, a trust or will provision must not prohibit marriage altogether or severely limit a beneficiary’s choice of spouse.

A dispositive instrument, will or trust, may provide for a beneficiary in the event of a divorce or death. A special disposition to an unmarried beneficiary may be available to relieve pressure upon the beneficiary to remain in or enter a marriage. Wills and trusts can be custom drafted to fit many varied situations. Whenever possible, the construction of a trust instrument will be favored that upholds the validity of the trust and renders the instrument effective.  Despite judicial inclination to uphold trusts, provisions violating public policy will be held invalid.