Estate Planning Information Sheet 7

D.        Trustee:   Often times it is advantageous for asset/lawsuit protection reasons, to create a  trust to hold and secure your property for children or other beneficiaries following your passing.  Such trusts can be designed to provide your children or other beneficiary full access and even control of their own inheritance, while at the same time providing protection for those assets from lawsuits, divorce, and other “legal complications” (even ensure that an in-law does not gain control of the grandchildren’s inheritance in the event or upon the death of your child).  The trustee of a trust is the person or corporate entity responsible for the management of that property and is responsible to see that your wishes regarding the trust properties are followed.

As was the case of naming your executor or personal representative, you may also name an individual or more than one person or bank trust department to serve as the Trustee.   Also, most of our estate planning clients wish to name their spouse first as trustee, and then their children as successor trustees once they have reached the age of say, for example, 25 years in the event both parents (you and your spouse) have predeceased.  Please indicate the person or persons you would like to serve as your trustee (in the order you would like them to serve) and indicate if more than one person is to act as your co-trustees by listing them on the same line connected with an “and”.

Full Name                           Relationship                 Address                              Current Age

1. ____________________________________________________________________________________

2. ___________________________________________________________________________________

3. ____________________________________________________________________________________

E.         Guardian/Conservator:   Whom would you want to take care of your minor children, if any, at the time of your death, if something were to happen to you?  That person is known as the “guardian” and will be vested with physical custody and responsible for caring for the minors.  Obviously, your spouse, if applicable, would generally be first named in the event of your death or incapacity.  However, if both you and your spouse, if applicable, are killed or become incapacitated as a result of a common accident, please name the individual or couple whom you would wish to care for your children.  Would that particular individual or couple also have control over the children’s property (if yes, then that individual is known as their “conservator”); or, would the above-noted Trustee “control the purse strings” of any trust established for your minor children as well as be the conservator of any of their individual property (bank account, minor’s custodian account, etc.)? 

            The guardian and conservator/trustee do not necessarily have to be the same person or corporate entity.  In fact, many of our clients like the idea of naming different individuals in these capacity to serve as a “check and balance” for the physical care and financial maintenance of their minor children or elderly parents, as the case may be.

Guardian: 

Full Name                           Relationship                 Address                              Current Age

1. ____________________________________________________________________________________

2. __________________________________________________________________________________ 

Conservator/Trustee (if you simply wish to designate the Conservator to be the same as your above-noted Trustee, just indicate “same as Trustee”):

Full Name                           Relationship                 Address                              Current Age

1.     ____________________________________________________________________________________   

2. ___________________________________________________________________________________

F.         Specific Gifts:  Are there any particular items of real or personal property you would wish to go to certain persons; or, do you simply wish that your property be divided equally among your children or other designated beneficiaries?Full Name                    Relationship             Address       Age       Description of Property

1. ____________________________________________________________________________________

2. ___________________________________________________________________________________

3. ____________________________________________________________________________________ 

G.        Charitable Gifts:  Do you wish to provide for gifts to be made to your church or a favorite charity or charities upon your death?  Some of our clients, particularly those who travel a good bit as a family, wish to provide for such “contingency” gifts to their church or favorite charity in the event their entire, immediate family where to be killed in a common accident.  Please indicate if this is your wish by stating the charitable bequest as “contingent”; or, if not, please state that the gift is intended to be made upon your death regardless of any members of your family surviving.  From a tax perspective, it is generally most advantageous tax-wise, to make charitable gifts during your lifetime as opposed to at the time of your death; during lifetime, you gain the benefit of an income tax deduction.

     Full Name Of Charity             Address              Monetary Amount or Description of Property 

1. ____________________________________________________________________________________

2. ____________________________________________________________________________________

3. ____________________________________________________________________________________

H.        General Disposition Of Assets:   Finally, who would you want to receive all of your other assets (known as the “residue” of your estate) for which you have not made specific provisions under paragraphs F and G above?  The recipient of the residue of your estate can be a single person, or your residuary estate may be shared by more than one person if that is your wish, such as being divided equally among all your children in the event that your spouse, if any, fails to outlive you.  As noted above in our short discussion of Trustee selection, it is generally our recommendation that the property be held in trust for the person or persons desired to be provided for as your residuary estate beneficiaries (ensure lawsuit/divorce protection for up to three generations following your death).  Simply let us know your intentions in this regard.

            Please also consider who should receive this property if the first person(s) you name is not living at the time of your death, and even who you would want to receive this property if the alternative beneficiaries you name are not living at the time of your death or upon the termination of any trust you desire to establish for their benefit.  Many of our clients wish to establish a trust that will protect the children’s inheritance, while allowing them full access to their inheritance during their lifetime, and then passing the benefit of any remaining property following the death of a child, on to grandchildren and even great-grandchildren, as opposed to that property possibly passing outside the family to in-laws or “out-laws” in the event a divorce is in that child or grandchild’s future.  If these lawsuit protections are desired by you for your family members, then simply indicate below:  “trust for lifetime”.

             Full Name             Relationship                Address        Age           Description of Property

1. ____________________________________________________________________________________

2. ____________________________________________________________________________________ 

3. ____________________________________________________________________________________

As noted above, there are substantial “creditor/lawsuit protections” for your family members by maintaining their respectively inheritances under a trust that they themselves can control (what we generally refer to as a delayed distribution strategy that we can discuss further during our next meeting together).  We generally recommend allowing the children to keep their respective inheritances in trust for their lifetime to protect their assets from lawsuit, divorce, etc., and then distribute out asset at the latest possible time, say for example, when their children (your grandchildren) attain the ages of 25, 30 and 35.  This strategy provides the maximum lawsuit protection for both your children and their children as well. 

I wish to maintain trust/lawsuit protections for my family and future heirs to the maximum extent permitted by Alabama law.  (Yes/No)_____________. 

I.      Documents:    Below is a list of some of the documents we may need to review.  It is not necessary for you to bring these with you to our conference; however, we may ask for copies of them at a later time.  Therefore, if these are readily available prior to our meeting, if would be a good idea if you could bring these (preferably copies and not originals) so that we might go over these important documents during our meeting:

1.         Existing Wills, Financial Powers of Attorney, Advance Directives for Health Care (Living Wills), if any currently exist:

2.         Deeds.

3.         Life Insurance Policies (also bring copy of recent/past premium notices or bills for the policies).

4.         Beneficiary designations for your Pension Plan, IRA's, and/or Deferred Compensation Plans.

5.         Documents related to Business Interests (including buy-sell or stock redemption agreements).

6.         Trust Documents, if you have either previously created a trust or you are a beneficiary of an existing trust.

7          Previously filed Gift Tax Returns, if any.

8.         Pre- or Post-nuptial Agreements, Separation Agreements, and Divorce Papers, if applicable.

9.         Other Documents you believe to be relevant to your estate planning or about which you have questions.

I/We, the undersigned, hereby confirm that the above information is true and correct to the best of my/our knowledge.  I/We understand that my attorney and possibly other advisors will advise me/us in accordance with the information provided and that any recommendations or documents provided by my attorney or other advisors will be made in reliance on this information and may not be appropriate or complete if such information is inaccurate or incomplete.

______________________________________                    _________________________________________

Signature                                                                      Signature of Spouse, if applicable

Date:__________________                                        Date:___________________

Copyright © 2013 Herbert E. “Chip” Browder

Reminders: 

 ****Reminder, if a Prenuptial Agreement was signed by the couple, then it may be advisable to update that agreement with an ERISA  spousal consent form be executed after marriage, which also requires a beneficiary designation and the following:

(i) Each spouse consents in writing to such waiver of pension plan rights; 

(ii) such waiver also designates a substitute beneficiary or the "form"of benefits and each spouse further agrees and consents to expressly permit designation by their spouse as Plan participant for any future beneficiary, form of benefits, or change thereof, without any requirement of further consent by said spouse; and,

(iii) each consents and acknowledges to the effect of this waiver of spousal benefits, which is hereby witnessed by the Plan representative or duly authorized Notary Public.

This Spousal Waiver of all Plan benefits is intended by the parties to fully comply with Section 1055 of Title 29 of the U.S. Code, as amended from time to time, and each party hereto hereby designates his/her spouse as special power of attorney to execute any other or further documentation to implement said intentions, this special power of appointment expressly further made a durable power of attorney, which shall not be effected by said party's disability, incapacity or incompetency.*****