Words of Warning!

Uniformed individuals mistakenly believe, in our "enlightened" technological age, that they are perfectly capable of developing their own estate planning structure through materials purchased off of the internet or from the services of a local general practitioner.  Unfortunately, with extremely rare exception, nothing could be further from the truth.  Individuals, internet document services and general practitioner are totally unaware of the myriad of ongoing management, tax (both state and federal), and asset protection problems that often arise in today's complex world.  Problems that occur include:

  1. Lack of attorney-client privacy privilege when materials are purchased off of the internet.
  2. Inability to consult with a licensed practitioner, experienced in estate planning and asset protection, on issues before, during and after the estate is executed.
  3. "Cookie-cutter" do-it-yourself documents that tend to be a "one shoe fits all" structure.
  4. Trust agreements, often typed in double-space text to make them appear to be more voluminous, which actually fail to contain a multitude of protective provisions that are otherwise available through the services of skilled licensed practitioners.  A viable protective Revovable Living Trust Agreement, using single-spaced type, should be not less than 50 pages in length.
  5. What is the actual value of the gross estate, once life insurance, annuities, retirement plans, real estate holdings, bank accounts, securities and brokerage accounts, and a multitude of other assets are included?  After totalling the gross value of the estate, would it then be subject to Federal death taxes?  If not, would it still be subject to State death taxes?
  6. Does the Trust Agreement clearly define such terms as "adoption,"  "beneficiary,"  "bequest,"  "education,"  "health,"  "grantor,"  "spouse,"  "per stirpes,"  "shall" verses "may,"  "support and maintenance,"  "property,"  and numerous other terms.
  7. Does the Trust Agreement allow the Grantors or Trustees to relocate the situs of the trust from one state to another for future administrative convenience purposes?
  8. What are the provisions for the Trustees and their successors?  This usually involves at least 4 pages of text.
  9. Are the "powers" of the Trustees fully defined?  This usually involves 11 pages of text.
  10. Are there provisions for the collection, administration and distribution of life insurance proceeds?  This usually involves 2 or more pages of text.
  11. What provisions, when applicable, convert the trust from revocable to irrevocable?
  12. Does the Trust agreement contain any protective discretionary spendthrift provisions?
  13. Is the Trust designed as a long-term versus a short-term vehicle so as to protect assets from probate costs and taxation in the estates of the children at their deaths?
  14. Does the Trust agreement contain highly protective,and enforceable, language designed to protect the Trust's income and assets from the improper conduct or financial problems (i.e., substance abuse, imprisonment, divorce, bankruptcy, wastefulness, future incapacitation and institutionalization) of a beneficiary?  This usually involves 8 or more pages of text.
  15. Does the Trust agreement contain comprehensive provisions dealing with minors?
  16. If one spouse is not a legal U.S. citizen, does the Trust agreement contain a QDOT provision to minimize death taxes?
  17. Does the Trust agreement contain protective language in the event the Trust becomes the owner of sub-chapter "S" corporate stock?
  18. Do the Trust and Last Will and Testament agreements contain comprehensive "no contest" (i.e., in terrorem) clauses (not allowed under the statutes of the States of Florida and Indiana) which protect the Trust's income and assets against greedy and/or power-mad heirs?  This usually involves 6 or more pages of text.
  19. Does the Trust agreement properly define when and in what manner a Grantor, Trustee or a Beneficiary may be legally determined to be incapable of managing the Trust's affairs?  This usually involves at least 2 pages of text, especially when the now required HIPAA language is included.
  20. When applicable, does the Trust agreement contain comprehensive and protective marital provisions?  This usually involves 6 to 9 pages of text.
  21. Does the Trust agreement contain other important protective provisions, such as:  (a)  use and disposition of the personal residence;  (b) future limited amendment power;  (c) arbitration, rather than costly litigation, of disputes;  (d) distribution of household effects;  (e) detailed cross references to financial and health powers of attorney, guardianships, arrangements to deal with governmental agencies; (f) procedures, at death, should the survivng spouse elect against the estate plan;  (g) arrangements for notices, at death, to creditors;  and (h) privacy protection against the unauthorized disclosures of Trust documents.
  22. If a Family Limited Partnership is utilized to allegedly provide estate tax savings and asset protection, the sought for tax savings will not occure if the founder is also the general partner.  And, the desired asset protection may not be available unless the FLP is located in one of only 9 states which limit a creditor's remedy "solely" to a "charging order."

Regardless of what an individual may believe, or what internet sites or general practitioners may claim in order to generate business, each of the foregoing needs to be considered and discussed in depth prior to the implementation of an estate plan.

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