FAQ - The Need for A Lawyer
IS LEGAL COUNSEL NEEDED IF THE DECEASED HAD A FULLY FUNDED LIVING TRUST OR PROPERLY DESIGNATED BENEFICIARIES ON LIFE INSURANCE CONTRACTS OR RETIREMENT PLANS?
Yes. In every instance, a decedent’s family, the personal representative of the decedent’s estate, any trustee of the decedent’s trust, the decedent’s life insurance agent, and the company benefits counselor, if any, should meet with an experienced estate planning attorney to review the status of the decedent’s plan and assets.
Any estate plan is based on the financial, tax, and family situations that were envisioned at the time it was prepared. It will need to be analyzed in light of current conditions, as there may be opportunities to reduce taxes or optimize other planning strategies on an after-death basis.
IF THERE ARE PROBLEMS WITH THE PLAN, CAN ACTIONS BE TAKEN TO CORRECT IT?
There are opportunities under the laws to change the estate plan of a person by having potential recipients of the property “disclaim” their various interests. In other situations, elections under the estate planning documents may be made which would alter previously envisioned tax consequences. These potential opportunities should be carefully reviewed with legal counsel and family members who will be affected by the decisions.
DAD DIED LAST YEAR AND NOW MOM HAS JUST DIED, AND MY SISTERS AND I ARE SUCCESSOR TRUSTEES UNDER THEIR TRUST. SHOULD WE MEET WITH A LAWYER?
We recommend strongly that you and the family have a meeting with the lawyer who prepared your parents’ estate plan. Even though the trust—if properly funded—will avoid probate, there are still matters that have to be accomplished:
*Issues regarding income and estate tax returns need to be discussed.
*Your mother’s assets need to be valued.
*Insurance claims need to be made.
*Retirement plan options and elections need to be analyzed and discussed.
*Debts and expenses need to be scrutinized and paid.
*Tax returns need to be prepared and filed.
*Finally, assets have to be distributed according to the instructions of your mother and father.
IF I HIRE AN ATTORNEY TO HELP ME ADMINISTER MY SPOUSE’S TRUST, WHOM DOES THAT ATTORNEY REPRESENT?
In most situations, an attorney is retained to represent the trustee on behalf of the trust, so the attorney does not represent the beneficiaries in their individual capacities. The trustee has a fiduciary obligation to the beneficiaries, and the attorney must advise the trustee on how to carry out the duties involved. The beneficiaries should retain their own attorneys if they believe the fiduciary obligation has been compromised by the trustee.
When the surviving spouse is a trustee and a beneficiary of a deceased spouse’s trust, conflicts may arise. This is especially true if the surviving spouse is not the only beneficiary and is a sole trustee or a cotrustee with persons he or she controls, because this situation may lead to disputes over the proper valuation and distribution of the trust assets.
It is important that a surviving spouse who is both a trustee and a beneficiary under the same document resolve the question of whom the attorney represents before any administration of the trust begins.
To discuss your specific needs, call 1-614-760-1801