+ What is the difference between a will and a revocable trust?

Think of a Will as a photograph and a trust as a movie. A will looks at your assets at an instant in time – the date of your death – and is limited to that moment in time. It is a way of ordering how your debts are paid and your assets are transferred after your death. A trust acts over time, sometimes for decades, and can hold assets, sell assets and acquire new assets as necessary. It also can change how beneficiaries are treated over time, depending on their age, ability and whether they have mental, addiction or physical health issues.

A revocable trust can take the place of a Will, and directs the distribution of your property in the same manner. Revocable trusts have the advantage of avoiding probate, a process which is public, costly, and time-consuming. This is particularly beneficial if you own real estate in more than one state. If your trust owns all of your assets, you eliminate probate in each state where you own real estate.

A revocable trust also provides for incapacity planning by avoiding the conservatorship process, which is established through the court. The conservatorship process is essentially probate for a living person and it comes with the same drawbacks, including being costly, open to the public, and time-consuming. However, a properly funded revocable trust will eliminate the need for a conservatorship because the trustee of the revocable trust can use the trust’s assets to provide for the trust’s maker in the case of incapacity.

With a trust, you must transfer legal ownership of substantially all assets to your trust while you are living. Some assets cannot be transferred to the trust, but instead should be “payable upon death” to the trust through a beneficiary designation. As you acquire additional assets, you must be careful to title assets in your trust’s name.

A few questions to help you decide are:

• Do you have property in multiple states
• Are you concerned about privacy
• Do you want to incorporate disability planning

  + What is probate?

  Probate is a court supervised procedure to identify all assets owned by a deceased person (a “decedent”), identify the decedent’s creditors and beneficiaries, and the distribution of assets accordingly. Probate is required whether you have a Last Will or not. Because probate is a formal court proceeding, with built-in waiting periods, a simple, uncontested probate can last 9-12 months or more and cost several thousands of dollars.

  + Why should I prepare an estate plan?

  Who do you want to inherit your property? When do you want them to receive it? In what proportions and under what conditions? If you choose not to plan and make these decisions, the state where you live will decide this for you. (This is called intestacy).

Your default beneficiaries will be based on whether you were married and who among your descendants or other relatives are still living. Generally, your assets will go to your closest living relatives. No assets will be distributed to charities that you regularly supported in life, and no consideration will be given to how close you were to a particular relative. For example, you may not have spoken to your brother in decades, but have a close relationship with your brother’s son. Despite your estrangement from your brother, if he is your closest living relative, he will get an inheritance and your favorite nephew won’t.

Property is generally distributed outright in the intestacy. This may not be the best option for your heirs, who may not be able to manage the inheritance, may be in the middle of a divorce or bankruptcy, or may be under age. Planning now gives you the opportunity to choose your beneficiaries and how they receive their inheritance.

Finally, if you have minor children, you can designate who you would like to raise your children after your death.

+ What is a revocable living trust?

A Revocable Trust, also called an inter vivos trust, a living trust, or a Grantor Trust, and is a trust over which the Grantor retains the right to revoke the transfer. As such they are not considered to be a completed gift and are disregarded for income tax purposes so long as the Grantor is alive. Once the Grantor gives up the right to revoke the trust, or dies, the gift is complete and the trust becomes an irrevocable trust.

The primary reason most people establish a revocable living trust is to safeguard their estate (and family) from having to disclose their assets during probate. If your estate goes through probate, your assets will be a matter of public record.

Most people name themselves as their trustee and appoint their primary beneficiary (spouse or adult child) as a successor trustee. Upon the trustee’s death, the assets in the trust go directly to the successor trustee without a break in the trust’s continuity.

A revocable living trust can also help with managing your property and with care of your property if you become disabled.

*As a caution, if you divorce, the trust does not automatically revoke. The successor trustee will need to be updated in accordance with the marital changes.

+ How can I protect my assets in the long-term?

As people get older and consider retirement, their goals may include retaining as much of their estate as possible for the important people in their lives. Estate planning includes using legal tools such as trusts, annuities, and also wealth planning and tax protection strategies to shield your assets from outside parties who may attempt to seize them.

+ What if I have an unusual collection I want to preserve?

You have lived a full life and as a result have acquired art or collected valuable antiques or automobiles. There are special considerations that should be made for any unique asset that you wish to be preserved or distributed in a specific matter upon your death. Specialized knowledge of the collections value, origin, and ownership are just part of the additional planning that goes into estate planning for these special collections.

+ I am an art dealer, how can I protect my collection?

Steps for art dealers are significantly different than for collectors. Do you maintain an inventory of works that are on loan or on consignment? Has all of your artwork been appraised by a professional? What about copyright issues? These are a few of the questions we begin with in evaluating your estate and business succession plans.

+ Where do we start with a family business succession plan?

To begin please understand that the purpose of such a succession plan is to avoid the corrosive effect of disharmony and conflict between family and non-family stakeholders in the business. So, the first thing to do is to discuss your desires and objectives regarding business succession and estate planning with your family, your management, your professionals and other stakeholders in the business and see if, with help, you can have everyone agree on a common goal for the overall organization that is your business, your family and your wealth management.

Once everyone agrees to the common goal, it is easier to set priorities to the overall objectives, which usually include growth of both the business and the family, personal and financial security for the stakeholders involved and a high level of personal satisfaction at being a part of the family-business-wealth organization.

As your attorney we will ask you many questions and ask for certain legal and financial documents, to obtain a thorough and accurate assessment of your situation and how what you have constrains you from getting what you want. We connect and collaborate with your other professional advisors, including your accountant, insurance advisor, financial planner, and perhaps your banker, to obtain further information and conduct a financial and tax analysis.

We will also want to evaluate your company's management and ownership situation, as well as your own personal family and marital situation so we can map out the strategies and tactics to achieve your objectives and move you closer to your common goal.

+ What can we do to ensure our legacy is maintained in the next generation?

Families and businesses are complex organizations, and family-controlled businesses are even more complex. By their nature, such complex systems are counterintuitive, and where family and business overlap you need a process is needed both to identify existing problems and to anticipate future issues to maintain not only financial security, but also a level of personal satisfaction and growth. This is especially true when there are deeply held family and business assumptions that influence the way that individuals think and act.

To ensure your legacy, you need help defining problems, formulating and testing solutions, and implementing those solutions while avoiding actions that spawn more problems in the future. A setting, such as a family council, can be the place where you can learn together, ask the right questions, and avoid falling victim to the day-to-day pressure to leap to a solution without adequate analysis of the situation. Finally, you need to motivate individual members of both the Family and the Business with confidence that they can be part of successful individual and organizational change, and avoid bad behaviors and disruptive conflicts.

+ How can a family office benefit our children?

A family office, whether a single-family office, a multi-family office or a commercial family office benefits you most when it is necessary to achieve the family's common goals. Forming and maintaining a family office relationship is the best strategy for meeting family objectives and executing on tactics is necessary to achieve the family's objectives. This includes things like choice of entity, being limited to only family as clients, what to outsource and what to bring in house, governance and oversight.

A family office is more than sufficient to meet the family's goals in the long run whether operating a profitable business, having enough income and returning a profit to the owners of the family office beyond just the tax savings and ease of use.

A family office can provide and protect financial assets for children and can be set up to fund special needs and education. The family office teaches the members of the family the function and executive decisions required in running a business.

+ What is elder care planning and why does our family need it?

Elder care planning involves a comprehensive strategy to ensure a senior’s wishes are honored and assists designated caregivers and/or advocates in handling the physical, personal, and financial affairs of a person entering the final phases of life.

+ How are you doing appointments with Covid-19 precautions?

While we do see clients with masks and distancing procedures in place, we encourage remote consultations. We can discuss your matter via phone call, communicate using email and electronic filings, or arrange for a video conference via various platforms.