March 2011 Archives
Dear Liza: We're in the process of establishing a Child's Trust as part of our estate planning; the Trust would exist until our daughter turns 35 (32 years from now; we're both about to turn 50). We have created a list of four Successor Trustees, but each one is either our age or slightly older. Nolo's advice is to list a last choice a "private trust company." What's that? It's great that you're thinking about how old your trustees are going to be when you daughter is 35--sadly, our trustees age right along with our kids. I am not familiar with the term 'private trust company' but I think Nolo may be suggesting that you consider naming a private fiduciary as a backup trustee. This is someone who is licensed to serve as a trustee, but is not a bank or a large corporate institution. Such people are licensed in California via the Department of Consumer Affair's Professional Fiduciaries Bureau. Alternatively, you might consider allowing your daughter to become the Trustee if none of the above can serve and she is over a certain age, say 28. (Serving as her own Trustee would give her management control over the trust, but still protect the trust's assets from her creditors or a bad marriage.) You might also, though, check with the bank where you do most of your business, you might find that their rates are competitive for trust services.
Dear Liza: I am writing my first Will. I have two children with my current husband. He has one surviving child from his first marriage. I don't want her to receive anything if my husband dies before I do, I just want my two kids to inherit what I leave behind. I am not sure what to do? I think that the best thing to do in a situation like this is for your Will to be super clear. Name your children with your husband. State that he has a daughter from his previous marriage. Then make sure that your Will says that you have not adopted this child, do not have a parent/child relationship with her and that she is not to be considered a child for purposes of your Will, but that this term should only apply to your two, mutual children. Better to say this in the Will itself and not rely on anything separate from it, since things like that can get lost. If you are using software to do this Will, only list your two children. Usually you can add a new paragraph on your own, somewhere, to acknowledge this unadopted step-daughter and clarify your wishes with respect to her. If the software won't let you do this, see a lawyer who can draft just what you need.
Dear Liza: we had a special needs trust drawn up by a lawyer for our disabled daughter who has turned 21 and is entitled to an annuity. Our lawyer is stating in
the trust that any benefits received by SSI or medicare throughout her life
must be reimbursed to the state (new york) upon her death or upon
termination of the trust. We want her to be entitled to government benefits
so that she can stay active (day programs, job coaching, etc) but we were
surprised to read in the drafted trust document that any of these benefits
would have to be "paid back". Is this true in New York State? If the money that you are going to place in that Special Needs Trust is her money, and not a gift from a third party (and this is often the case if there's an accident settlement or the like), then, yes, your lawyer sounds as if he or she is setting it up correctly. A self-settled Special Needs Trust requires, by federal regulation, that the assets left at the end of the beneficiary's life must be paid back to the state Medicaid agencies that provided service. Here's a link to a helpful site, The Learning Disabilities Association of America, read the entry on Restrictions on Self-Settled Special Needs Trusts.