Tag Archives: trust

Probate and Trust Bill Headed for Haslam’s Desk

Update: Read Public Chapter No. 290 here.

SA0426 which revises a number of areas of the Wills, Trusts and Probate statutes has cleared the Tennessee Senate and is headed to the Governor’s desk.  This bill updates law in the following areas:

Practitioners Beware: Modifying or Decanting a GST Grandfathered Trust can cause the Loss of GST Exemption

danger thin iceCare must be taken when decanting or modifying older trusts.  This is especially true if the goal is to extend the term of the trust.  In truth, it should generally be avoided.

Modifying or decanting an irrevocable trust can cause a trust that is exempt from the GST because it was irrevocable prior to the effective date for the GST in 1986 (known as a “Grandfathered Trust”) to lose its exempt status.

Administrative modifications such as changing trustees is generally OK.  What should generally be avoided is shifting benefits to a lower generation.  You should carefully review Treasury Regulation section 26.2601-1 before making any changes whatsoever.

Such trusts may nevertheless be decanted or modified for purposes of extending the term of the trust.  However, the longest time that such a trust may be extended is the latter of: Continue reading Practitioners Beware: Modifying or Decanting a GST Grandfathered Trust can cause the Loss of GST Exemption

When the Estate Plan Goes South: Fiduciary Litigation – Beneficiary versus Trustee.

fiduciary litigationI know you have been hanging on my every word.  I know that you have been wondering what could I possibly be up to that is so important that I don’t have time for you.   I’m sorry.  I never intended to neglect you.  My only excuse is that litigation is taking up more and more of my time.

But Rob, I thought you were an estate planner!  What are you doing in litigation?   That’s an excellent question.

The answer is: Fiduciary Litigation.

What is Fiduciary Litigation you ask?  Another great question.

Well, lets start with what a fiduciary is.   Continue reading When the Estate Plan Goes South: Fiduciary Litigation – Beneficiary versus Trustee.

Divorced? It is time to update…

soapboxLet me guess.  The last person you want to see after a divorce is me, another dad-gum lawyer.  I don’t blame you.

However, before you say that, know this: your designated beneficiary did not change just because you got a divorce.  Here I am referring to life insurance, retirement accounts such as 401(k)’s and IRAs, and anything that allows you to name a beneficiary.  If you did not change your beneficiaries after you got a divorce, then your ex-spouse probably gets everything if something happens to you.

In both Arkansas and Tennessee, provisions to an ex-spouse are revoked.  This is not the case in Mississippi.  In Mississippi, the provisions for the ex-spouse remain and he or she takes whatever you may have left them—perhaps everything.

No matter where you live, it is still time to revise your Will.  Had a knowledgeable probate judge not been on the bench when Lorenzen Wright’s ex-spouse walked into probate court with his Will that left her everything, she might have been appointed in control of his estate.  In fact, she tried.  Order opening estate of Lorenzen Wright

Now you’re thinking (perhaps cynically)—there’s nothing left to get. Ok. Even if that’s true now, that may not be true five or ten years from now.

When will you update if not now?

Its time for an update.

Stay Tuned.

Rob Malin

What is a Revocable Living Trust?

Excellent question.  I’m glad you asked.

Broadly speaking, in estate planning there are two types of trusts: revocable and irrevocable.  This post will address revocable trusts.

Revocable trusts are also known as living trusts.  The short answer is that a revocable trust is a Will substitute.  For the most part, after death the same things can be done with revocable trusts as can be done with Wills.

The real difference between a revocable trust and a Will is that to function properly, a revocable trust must actually own your assets (or be named as a beneficiary).  In this sense, revocable trusts are like personal holding companies.  A good analogy is thinking of a public company such as FedEx.  FedEx owns planes and numerous other assets.  FedEx has shareholders and a CEO named Fred Smith.  During your lifetime, you are the CEO (or trustee) of your trust.  You are also the founder (known as either grantor, trustor, or settlor) and the shareholder (or beneficiary).

Continue reading What is a Revocable Living Trust?

Having a Baby? You need a Will.

If you have a child or are expecting your first, its time to pony up and get a Will.  This is your responsibility as a parent.

Personal Guardian.  If something happens to you, you can name a guardian for your child in a Will.  A guardian is the individual who makes decisions for your child such as what school and church to attend, who cares for the child, where the child lives.  Typically the personal guardian raises your child in your absence.  If you do not have a Will or fail to name a personal guardian in your Will, then a Court has no guidance as to who it should be. It is not hard to imagine that the choice a court might would make you roll over in your grave.  Why leave it to chance?

Financial Guardian. If your child is under 18, then the child is legally unable to manage their own property.  If the child inherits something, then the child must have a financial guardian appointed by a court to manage their inheritance.  The financial guardian has to ask the Court’s permission to access trust property and must have an attorney.  In other words, it is expensive and avoidable.

Continue reading Having a Baby? You need a Will.