Tuesday, June 22, 2010

Estate Planning 10: Trusts vs. Wills

Today's topic is an examination of the difference between living trusts or otherwise known as "revocable living trust" and last will and testament.

Living Trust

A living trust is written agreement similar to a will that creates a smooth transition upon incapacity and death. Unlike a will, a living trust is "living" because it takes affect during your lifetime. A living trust assist you to plan for incapacity and has provisions, which enable you to set up a trustee in case you cannot make financial decisions for yourself. Furthermore, a living trust avoids probate court and is a private document unlike a will. A living trust creates a smooth process and a process where your beneficiaries can simply avoid court and avoid the costs and expenses of probate court.

Unlike a living trust, a will is public information and your neighbor has a right to view your will. A living trust is not a public document and your neighbor or friend does not have any rights unless they inherit under your living trust. Moreover, a will must undergo probate court because a court must supervise the administration of the inheritance process. This is important because probate court requires court filing fees, surety bonds (unless waived), and attorney's fees (typically). A will often times creates will contests because mailing out notices to beneficiaries results in beneficiaries that are unhappy with the distribution of assets. Therefore, unhappy relatives challenge the validity and substance of the will.

Sean Robertson is an estate planning attorney and founder of Robertson Law Group, LLC. Robertson Law Group, LLC is a wealth preservation law firm concentrating in wills and trusts planning, estate planning, asset protection, and probate and guardianship law. Sean Robertson can be reached at (312) 498-6080 or (630) 364-2318.

Thursday, June 17, 2010

Will Contests: Six Months To Challenge

I received my first will contests today as an attorney. Unfortunately, one of the beneficiaries challenged the will one (1) day prior to the six month date. With a will contests, a beneficiary has six (6) months from the date of entry of the will into probate to issue a will challenge. In the will contests, the upset beneficiary is claiming undue influence and coercion. Basically, this means that my client persuaded her father to sign the will and give everything to her.

One of the reasons you should not do your own will is lack of experience. In this case, my client drafted her own will and had her father sign the will. Second, the father signed the will in the hospital, with possible medication. Third, it is a will, which is public information. A rule of thumb, a revocable living trust is the simpliest way to avoid a will contest. This case likely would not have a will contests if a revocable living trust was involved. A revocable living trust does not require notifying a disgruntled beneficiary about the existence of a will. A revocable living trust or otherwise called a "living trust" is a private document.

Sean Robertson is an estates and trusts attorney that concentrates in wills, trusts, estate planning, asset protection, and probate. Sean Robertson may be reached at 312-498-6080 or 630-364-2318.

Sunday, June 13, 2010

Asset Protection for Police Officers and Detectives

Lately, I have been asked more questions about asset protection for police officers and detectives. Asset protection is a legal concentration, which is concerned about placing assets such as real estate, certificate of deposits, investment and vacation real estate, and other assets beyond the reach of lawsuits and punitive damages.

Asset protection is important for police officers and detectives because privacy is a main goal of asset protection. Often times, I met with police officers or detectives and their addresses are public record. This is a big no-no. A private land trust is a great mechanism to keep your own address secret. Keeping your property outside of your personal name is a basic asset protection strategy. It is important because a creditor or aggressive plaintiff often times will not sue you if they do not think that you have sufficient assets.

This past Friday, I was at the Circuit Court of Markham and had a criminal defendant that asked me whether I could represent him in a lawsuit filed by his police officer that arrested him for selling drugs. My answer was "No", but obviously this is a prime example of why police officers must protect their personal residences and assets.

Asset protection utilizes trusts, personal residence trusts, family limited partnership/LLCs and irrevocable trusts to protect one's assets. A personal residence trust is a trust that owns your house and/or any vacation or investment real estate. The title holder of the property is the personal residence trust. Thus, the title to the property is outside of your personal name. The beneficiary of the personal residence trust is typically an irrevocable trust or family limited liability corporation or family limited partnership. Liens and judgments do not attach against a personal residence trust because the property is outside of your personal name. Typically, a personal residence trust or otherwise known as a "private land trust" is not a full proof way to structure your real estate interests. There are ways to use a private land trust and make it a good aset protection tool.

Creating a family LLC/Partnership as the beneficiary of a land trust is one way to increase the asset protection of a private land trust. The family LLC/partnership is a mechanism where a police officer and their wife (if applicable) are the managing owners of the LLC. For example, ABC, LLC has voting and non-voting shares. Jim is a detective and Sue is Jim's wife, which is a teacher. Jim and Sue each own 1 percent interest in the voting shares of the LLC. As managing members or managers, Jim and Sue have the ability to control the Family LLC/partnership. Jim and Sue only have 1 percent interest in voting shares because they want minimum level of wealth in the non-voting shares. Jim and Sue and one other person take a total of 98 percent of the Family LLC/partnership as non-voting owners. The benefit of non-voting owners is limited liability protection. The liability exposure of non-voting owners is your initial contribution. For example, if Jim and Sue make each $250 initial contribution to gain 98% ownership of the non-voting shares of the Family LLC/Partnership, their maximum amount they may lose is $250 per person. Therefore, most of Jim and Sue's assets will be placed in the non-voting shares, which means that their non-voting shares become untouchable by lawsuits, judgments, and punitive damage awards.

The benefit of a family LLC/Partnership is that a creditor may not foreclose your Family LLC/Partnership. A creditor may only have a charging order against the Family LLC, which means that the creditor only gets the debtor (Jim)'s interest in the Family LLC/Partnership. As managers, Jim and Sue may elect to distribute the Family LLC's assets to each other. In real terms, Jim and Sue will not make any distributions and the creditors only have a tax liability. This discourages your creditor(s) from going after you. For maximum protection, Jim and Sue each will own either a family LLC, which will be managed by Sue or Jim and Sue will have their own irrevocable trust. An irrevocable trust is a trust that is unamendable and unchangable. Thus, Jim's interest will be managed by Sue or somebody else, while Sue's interest will be managed by Jim or somebody else. We can include a provision in the irrevocable trust where the trustee changes if a creditor has filed a lawsuit. We also can have a Trust Protector, which is typically an attorney that oversees this provision and makes a judgment whether the trustee should be replaced. This enables Jim and Sue to gain additional asset protection. It is more difficult to seize Jim and Sue's assets when Jim and Sue do not control their assets. Thus, we have a lot of mechanisms in place to protect Jim and Sue's assets from creditors. First of all, we can include additional measures if Jim and Sue want the additional protection, which will make their assets unavailable such as a mortgage or security interest. I have decided that I am going to write an Asset Protection Guide for Police Officers and Detectives. This guide will be more comprehensive and better explain asset preservation planning is simplier and easier terms.

Sean Robertson is an asset protection attorney that concentrates in estate planning, asset protection, and advanced planning. Sean Robertson can be reached at 312-498-6080 or 630-364-2318.

Thursday, June 10, 2010

Will Contests

Today, I received a phone call from a potential will contests opponent on one of my clients. Unfortunately, for this unhappy beneficiary, she had six (6) months to bring a will contest from the date the will was admitted into probate court. Thus, it has been 6 months and 2 weeks and therefore, a will contest will not win.

A way to avoid will contests is to avoid doing a will. Earlier today, I spoke with a prospect from the State of Washington regarding wills and trusts. This particular prospect has seven (7) children and one of the children is constantly in litigation with her and her husband. I suspect that this client is fighting a former spouse over child support or other issues. For this family and many others, a will is an absolute no-no. It is a bad idea because one of the siblings will fight any will and end up costs the estate thousands of dollars in legal fees and costs. Wills encourage will contests because estate attorneys must mail out notices to all potential heirs even if they are not inheriting assets. Thus, the disinherited heirs get disgruntled and have no economic incentive not to challenge the will. In contrasts, a revocable living trust is a private document and is more likely to avoid litigation. With a revocable living trust, no attorney in their right mind would ever mail out any notice to anybody that does not inherit. This would be the poster child for stupidity. Sorry today because I obviously have jokes today.

Therefore, if you want a will contests, hire an attorney or do your will on legalzoom.com. If you want a smooth transition upon your death or incapacity, hire an estate planning attorney.

Sean Robertson is Principal and Founder of Robertson Law Group, LLC. We are estate and asset protection attorneys that concentrate in helping seniors, business owners, and middle class families. We are down to earth and have the ability to travel to you if you have mobility issues. We can be reached at 312-498-6080 or 630-364-2318.

Wednesday, June 9, 2010

Out of State Property & Wills

Yesterday, I spoke with a gentleman from Tennessee regarding wills and trusts. He owned property in Tennessee and Maine. After explaining to him the differences between wills and trusts, he fully understood why the trust make more sense. When you have property outside the state that you reside, a probate court procedure is required. For example, Sam owns property in Illinois and Florida. If he dies with or without a will, Sam must undergo probate court in Illinois and Florida. In contrasts, setting up an revocable living trust or living trust would enable Sam to avoid probate court and smoothly transfer the property to his beneficiaries without delay or court involvement.

Tuesday, June 8, 2010

What happens when you die and own property?

This morning, I was speaking with a business client who also owns his own home with his wife. In Illinois, when you die without a will, a state law called "intestate succession" determines who is the rightful heir of your estate. Yes, your loved ones must undergo a court process called "probate". Probate court typically takes 9 months to 2 years and higher to finalize. This court process is expensive because you must typically pay an attorney and your costs are excessive. More importantly, you cannot sell your property or your inherited property, without providing good time to a prospective buyer.

Second, if you have a will, you still must undergo the probate procedure. The will must be admitted to probate and must be mailed to all the potential heirs. This often times creates court challenges, which makes the probate court procedures more costly and time consuming. Additionally, with the economic challenges of today, your inheritance may be seized by your creditors or a divorcing spouse. In contrasts, a living trust or otherwise known as a "revocable living trust" is similar to a will. Unlike a will, a living trust will not be subject to any court proceeding. In fact, a living trust creates a smooth transition upon your death or incapacity. Unlike a will, there are no expensive attorney's fees and costs. Your estate may be administered in less than a week or thirty (30) days.

Sean Robertson is an estate planning attorney that concentrates in estate planning, wills and trusts planning, probate and guardianship proceedings, and asset protection law. Sean can be reached at 312-498-6080 or 630-364-2318.

Sunday, June 6, 2010

Gary Coleman and Updating Your Will

I enjoyed watching Gary Coleman and A Different Strokes as a kid. Gary Coleman was a talented and funny actor. Unfortunately, Gary Coleman did this week. This blog is about the importance of updating your will or trust documents. Gary Coleman did not get the opportunity to update his will prior to his death. He likely had his ex-wife down as a beneficiary. There are a lot of divorcees that likely have not amended their will or trust or changed their beneficiaries.

You should update your will or trust every two (2) years. Your executors and trustees die and new children are born throughout the years. At the Robertson Law Group, LLC, we will provide you a free initial consultation. We can get all of your documents signed and funded within two (2) weeks.

We can be reached at 312-498-6080 or 630-364-2318. Check out our website at www.RobertsonLawGroup.com.

Friday, June 4, 2010

Probate and Estate Planning

Probate court is often times a feared court because it is expensive and time consuming. One is affected by probate court when they die with or without a will or an adult loses their ability to make healthcare and financial decisions for themselves.

Most people misunderstand that wills are excellent post-death legal strategy. In fact, a will must undergo a probate proceeding called probate. Thus, you must hire an attorney, pay court costs, and wait a minimum of 9 months to 2 years. In contrasts, setting up a trust or revocable living trust is a way to avoid a court proceeding and to avoid the pain associated with probate court. A trust is similar to a will because it distributes property upon a death. Unlike a will, a trust is an effective estate planning solution. There is no need for a court processs upon death and the estate administration is simple.

A trust also enables you to plan for an incapacity and designate a guardian for your children. A trust is an excellent legal strategy for planning your affairs upon your death.

Sean Robertson, Attorney at Law
Robertson Law Group, LLC
(312) 498-6080 or (630) 364-2318
Offices in Chicago and Naperville, Illinois.
Email: RobertsonLawGroup@gmail.com

Thursday, June 3, 2010

Economy and Estate Planning

Today, I was speaking with a fellow attorney from downtown Chicago. This attorney msde a comment that he would not attempt to counsel or draft a trust or a will. Why is this? Estate planning and wills often times involve real estate and tax issues and unfortunately, most attorneys are ill equipped to understand when your matter may be simple or more complex.

For example, I recently had a client that was married but her husband was disabled and unable to make decisions for himself. This simple situation is more complex because the estate planning attorney must understand medicaid eligibility and elder law. Thus, it is important to hire an attorney that has the proper qualifications because a simple mistake may costs you thousands of dollars.

In my conversation with this attorney, we discussed that the economy is getting better. I have personally witnessed estate planning increasing because the economy is getting better. For many individuals and families, estate planning is a serious but often neglected conversation. Estate planning is crucial because if you die with a will or without a will there are serious negative consequences.

If you die without a will, the State of Illinois will determine who should inherit your property. Furthermore, doing nothing will costs your family more money in the long-run. Often times, an accident can occur and you and your family are ill-prepared for an incapacity or family death. Combining the family death with the legal proceedings creates a difficult time period for your family members. This is further worsened because an ill-prepared estate plan causes severe family fights. These fights commonly occur with blended families such as step parents and children. There are natural conflicts which exist and inheritance and money matters threaten family harmony. These conflicts result in hurt feelings and thousands of dollars in legal fees and court proceedings that last years and longer.

Sean Robertson is an estate planning attorney that concentrates in estates and trusts, advanced estate planning, and asset protection. Sean can counsel you and your family on how to properly set up a realistic but effective estate plan. Sean Robertson can be reached at 312-498-6080.

Robertson Law Group, LLc
(312) 498-6080 or (630) 364-2318
Email: RobertsonLawGroup@gmail.com

Wednesday, June 2, 2010

Why Standard Powers of Attorney are Good?

A couple weeks ago and last week, I was presented with two (2) powers of attorney for healthcare that were not standard short-form powers of attorney. Standard powers of attorney for healthcare and property are important. They are important because hospitals, physicians, and banks are accustomed to seeing them. This gives them ease about accepting them. Non-standardized powers of attorney cause concern because hospitals, physicians, and banks are afraid that may not be legal. Therefore, the important lesson of the day is to use standard powers of attorney as highlighted in the power of attorney statute in Illinois.

Tuesday, June 1, 2010

Why Wills Are Worthless?

The topic of estate planning is not a sexy topic, but one that must be addressed by individuals and families. A Will is a common myth among the U.S. Society. Everybody believes that a will is the way to distribute your assets upon your death. In fact, a will is not a good way to gift your assets upon your death.

First, a will does not avoid the court process called probate court. Probate court is the court that administers wills after a person has deceased. A will must undergo a court process called probate because it is required by law. This probate process takes a minimum of nine (9) months to two (2)years to complete if you are lucky. An attorney often makes between $1,500 to $5,000 on an average probate case plus costs. Costs include filing fees, process server fees, publication fees, and other fees. A will often times encourages disputes because an lawyer must mail out certified notices all the potential heirs. This leads to disputes because one heir may not be happy with the will. The will is a public document, which means that anybody has the right to view your will.

In contrasts, a revocable living trust or otherwise known as a "living trust" is not probatable if set up correctly. The living trust avoids all court proceedings because your assets are not titled in your personal name. They are titled in your living trust's name. The living trust has a trust agreement, which outlines your wishes upon your death. Thus, your assets get distributed per your wishes. Unlike a will, a living trust is a private document. It also is not a document that must go through the probate court process.

Sean Robertson is an estate, corporate, and asset protection attorney. Sean can be reached at 312-498-6080 or 630-364-2318 or via email at RobertsonLawGroup@gmail.com.