You Can Have Your Cake & Eat it Too (Part 4: The Story of Two Friends)


TRUST Me

Part 1, Part 2, Part 3

What about a Trust?

Marge and Elizabeth’s friend Betty lost her husband about a year ago. Like Elizabeth, Betty didn’t struggle with probate after her husband, Frank, died. In fact, she spent very little time settling Frank’s affairs, other than marking their joint income tax return as “final.”

Then, when Betty died two years later, her 3 children got together, expecting a hassle. But what they soon found out was that, like their mother when their father died, they had very little to do. Betty and Frank’s oldest, Michael, was able to take charge, sell the family home and cars, pay a couple of bills and then distribute all the remaining cash and investments equally to all the siblings. 

Although Betty’s youngest daughter, Vivian, desperately wanted her siblings to hold off on selling the house as she tried to convince her husband to move their family into the home, she wasn’t able to hold up the process. Everything was distributed as per Betty and Frank’s instructions in less than 4 months’ time. The family incurred less than $2,500 in expenses settling their mother’s (and father’s) affairs.

Betty and Frank used a living trust to avoid all of the problems that plagued Marge and Elizabeth’s families’ estates experienced at each generation. 

You can think of a trust as a container for holding assets. You carry the container (your trust), and then when you can’t handle your finances yourself, you hand off the trust to a person you chose ahead of time—called your successor trustee. 

Your successor trustee can manage your assets for you while you’re alive but unable to handle things yourself and can also take over after you pass away.

Your trust doesn’t require probate court involvement, and your successor trustee has the final word about management, which means your family won’t run into a situation where one siblings holds up sale of a house or other property. 

Trusts also protect beneficiaries against themselves. In Betty’s case, her second daughter, Lucy, is terrible with money, still overspending despite having filed for bankruptcy twice. If a share of Betty and Frank’s money had simply passed to Lucy, there’s no doubt she’d have spent it within six months. But instead of cutting a check to Lucy when the kids were receiving their shares, Betty’s successor trustee held onto Lucy’s share, distributing it only as instructed in Betty and Frank’s trust.

If this story has created a need to learn more about Trusts and whether your or your loved one's estate planning is adequate, give us a call and schedule a time to sit down with one of our attorneys for an honest, no-cost assessment. We can be reached at info@sovelaw.com or 937-985-1843.