How To Use A Trust To Protect Family Assets
Video Transcript
Ray Hrdlicka – Host – Attorneys.Media
Even with a trust, you could still end up in court?
Andrew Dósa – Estate Planning Attorney – Tacoma WA and Oakland, CA
Right.
Well, the simple fact is, Ray, that there are people who start making up stuff about why they’re entitled to things. And that’s how you can get a conflict.
Good. I’m glad you’re smiling. It’s not funny when you’re in the middle of it. Let me give you an example.
I settled a case yesterday. My client was this lovely lady who had been the partner lover of, I’ll say, Bob. When Bob passed away, he had a will. He had a relatively small estate, probably less than $100,000, so he didn’t really need a trust. His will provided that she would get both of his cars. When he passed away, he only had one car. It did not say who would be the executor of the will. It did not provide for a distribution plan for any of his other assets. It didn’t identify all his assets, so there was a dispute about what assets were there.
So what happened is the two children who had been friendly to my client at the outset for 20, 25 years, and even most recently, turned on her and claimed that the will was not in his handwriting. It was. They ended up agreeing to do that, but when they were disputing it, they justified behavior and they took one of the cars that she had while she was in her exercise class. She comes out of her exercise class, the parking lot no longer has a car, and she thinks someone has stolen her car.
So we had a dispute over that. And then there were payments that he had made to her before he passed away, and they disputed that. We resolved it with a good result, without going into details. But it was painful for her. She had to pay me, and we had to mediate it through a settlement conference with a judge. And it was very stressful for her. Part of what she did was she paid a little more than she really probably had to. Not very much, but enough that it was expensive to her because she didn’t have much.
But it was worth it to her to buy her peace, to be free of this stress where these two children had been accusing her essentially of stealing money from their father. And it was a terrible situation.
The judge uses the example: He said he’d had a situation where there was a fight in probate where one of the daughters said, “I took care of mom for 10 years. That means she should have paid me $45,000 a year. So she was with me for 10 years. The estate owes me $450,000.” He kind of chuckled and said there only happened to be $455,000 in it. The question was, why did they not ask for the other $5,000 if they were greedy for the $450,000? Why did they ask for all of it? But it was a matter that got resolved.
That’s just an example of how things can go sideways. There’s a dispute about a will that’s legitimate.
I’ll just say if an attorney’s drafted that will, the attorney is exhibit A about why the person who drafted the trust had capacity, knew what he or she wanted to do, was acting volitionally—that means of their free will—and was aware of what they wanted to accomplish.
So you can have some protections, but disputes can still come up. It just makes your dispute, the challenge of a dispute, less powerful if you’ve got a good estate plan in place. It’s airtight with an attorney that can help you.
Andrew Dósa – Estate Planning Attorney – Tacoma WA and Oakland, CA
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