Tag: revocable living trust

Peter Karmanos And His Living Trust. What Went Wrong?

Written by kwmlaw on July 6, 2016. Posted in Kelly & West News.

The owner of the Carolina Hurricanes, Peter Karmanos, is being sued by his three sons for borrowing more than $100 million out of their trust fund. If you have been following the Carolina NHL franchise, you may have noticed that the numbers (fiscal and physical) have been down since the Stanley Cup win in 2006. Peter Karmanos has allegedly been using the money in various forms of supporting the franchise.

You may be asking yourself: If it is his money in the trust, what’s the big deal? Well you must understand how trusts work and you better read all of the fine print before signing one — even if you are a multi-millionaire.

The truth is that there are many different kinds of trusts. The two broad categories of trusts include testamentary and living trust. The testamentary trust is set up with a will and is only established after the grantor’s death. Living trusts are established through the grantor’s lifetime and are separate from a will. We are going to focus on living trusts for now. *Please contact us if you would like more information on testamentary trusts.

Like a will, the living trust is a document that describes your wishes regarding your assets, dependents, and heirs upon your death. But, the living trust allows you to bypass the probate process — the lengthy, court supervised process of administering an estate. The details of the trust mean everything. When creating a living trust, you (the grantor) must decide whether you want to establish a revocable or irrevocable trust.

Revocable Trust – Allows the creator to retain power over the assets. Under these conditions, the grantor is able to change or revoke the terms of the trust at anytime and transfer assets in and out of the trust as the grantor desires.

Irrevocable Trust – The assets no longer belong to the grantor, but to a separate entity and are no longer accessible by the grantor. The grantor is no longer able to make changes to the trust, in most cases.

Choosing between the two really depends on the goals and objectives of the grantor; however, most people opt for a revocable trust, unless they need an irrevocable one to accomplish a specific goal or objective. Most trusts actually allow borrowing, as long as it is in best interest of the beneficiaries. It all depends on the type of trust, and how it is set up. The actual borrowing of the money wasn’t the big issue for Peter Karmanos. You may be eligible to borrow money from a trust fund but annual payments of principal and interest are due. It is reported that Peter Karmanos has failed to make these payments that were due in 2014 and 2015. It is because of this that his sons called in the lawsuit.

Each trust is specific, unique, and set up accordingly for the grantor and the beneficiaries. Some trust terms may even waive the duty of the trustee having to pay the money borrowed back. An estate attorney can be a huge problem solver when dealing with the complications associated with setting up a trust. You must pay attention to all the details regarding your trust. Be knowledgeable about what you’re signing and know what you can and cannot do. We would love to meet with you and discuss your possibilities. Contact us for a free consultation to learn more about what type of trust may be right for you and your family.

Estate Administration: Save Your Family From Years Of Court Problems With A Revocable Living Trust

Written by kwmlaw on May 23, 2016. Posted in Kelly & West News.

Most people assume that after creating a Will, their family will be all set. Everyone will get what they are supposed to get based on what instructions they leave in their Will.

Unfortunately, the process of dealing with an estate after someone dies is not that simple. Your family can spend months or even years finalizing everything — even when you have a Will in place. Here’s why: the Will goes through several steps in court before the Executor can distribute your assets to whomever you direct. So yes, your instructions will be carried out, but it may take a while.

Revocable Living Trust

Your family can avoid this annoying estate process if you create a Revocable Living Trust. A Trust is considered a separate “person” or separate legal entity in the eyes of the law. Title (your ownership) is transferred to this separate “person” called the Trust. That way when you (the Grantor), die, the Trust still exists. And because you didn’t own anything — the Trust does — there is nothing to go through court, making the process much simpler and faster — and your family won’t have to ask for the court’s permission.

Another benefit: a trust is private. Wills are filed with the Court and therefore become public documents but the trust document (called the Trust Agreement) is a private document and is not filed in any court or put on public record. Also, what most people don’t know is that when a Will is probated with the court, the court requires quite a bit of information before probating the Will such as the deceased person’s name, social security number, family information, bank account information, real estate information and other information about whether the deceased person has assets, such as life insurance, that will be paid outside the estate. A trust avoids having to provide the court with this information.

Costs

Creating a Revocable Living Trust is more expensive. A Will costs about $300 to $750 to prepare; however the probate process runs about $1,500 to $15,000, depending on the size of the estate, making the total about $1,800 to $15,750.

A trust costs between $2,000 and $7,500. This means in a larger estate, having a trust can actually be less expensive. Those with smaller estates might consider the higher cost, worth it for the privacy and the ease of administration as discussed above.

Whichever route you choose is up to you based on your personal feelings on the matter, your budget, as well as the size of your estate. Regardless of which option you choose, it’s important to have some documentation in place so your family knows what to do when you pass. The gift of a well-drafted estate plan is one of the best gifts you can give your family. We’re happy to answer any questions you have about setting up a Will or a Trust. Give us a call for a free consultation.

Revocable Living Trusts

Written by kwmlaw on June 6, 2014. Posted in Areas of Experience, Wills & Trusts Lawyer and Legal Services.

Revocable Living Trusts

A revocable living trust is a great estate planning tool and can help you and your family maintain your privacy, plan for your incompetency, plan for specific family situations, and make your estate easy to administer after your death.

This is the cheapest option in estate planning because you only have to pay a lawyer once to set up the trust versus paying a lawyer twice, once to draft a Will and then again to administer your estate after you die. Also, a trust is a must-have when planning for young children or when planning older children, if you want to provide for them after they reach 18 years old. A trust offers quite a few advantages over a simple Will and can be specifically tailored to fit your individual needs. Contact us to speak to a caring attorney who can discuss your needs with you and help you develop and implement a plan that’s right for you and your family.