With living trust scams on the rise both nationally and in Georgia, many seniors are being tricked into buying costly and unnecessary financial products which jeopardize their long-term security. As an elder law attorney in Marietta, I want to expose these scams for National Consumer Protection Week (ncpw.gov).
Preying on loneliness and a common fear of the unknown among seniors, scammers and unscrupulous salesmen in the US and in Georgia have found a new way to defraud seniors out of thousands of dollars: living trust scams.
March 6-12 is National Consumer Protection week and as a Marietta elder law attorney, I am taking this opportunity to warn seniors of these costly living trust scams in the metropolitan Atlanta area.
Don’t get me wrong: Living trusts can be an excellent estate planning tool to avoid probate and ensure your wishes are honored after death, but they are not a one-size-fits-all document and certainly not right for everyone – especially seniors on fixed incomes with limited assets.
Yet through public seminars, phone, mail and door-to-door campaigns, seniors are being contacted by salesman outside of the legal field who offer to living trusts as the solution to all of their fears and financial worries.
High-pressure tactics such as gifts, companionship and exaggerations about death taxes and probate are used to make seniors believe that their assets will be tied up in court indefinitely and that their loved ones will be on the hook for thousands of dollars in taxes and legal fees after their death.
What the salesmen fail to tell these seniors is that they probably won’t even owe estate or ‘death taxes’ after their passing. Worse is that many of these “trust kits” sold to seniors only contain boilerplate language and really do nothing to avoid taxes or the probate court. The real goal of the scam is to gain access to the senior’s financial information through the Trust Kit so they can be railroaded into buying additional annuities or insurance products the senior does not need.
According to an AARP study published in 2000, about four million people older than 50 with less than $25,000 in annual income may have purchased costly, unnecessary, and potentially dangerous living trusts as a result of high-pressure sales tactics by firms falsely representing themselves as AARP affiliates. These numbers will continue to grow as seniors remain fearful about growing taxes and their future financial security.
To avoid becoming the victim of a Trust Scam, seniors should always shop around and check with a qualified estate planning lawyer before deciding on any type of will, trust or financial product such as an annuity or long-term care insurance plan. I also recommend that seniors:
- Never sign anything with options or terminology that you don’t understand.
- Don’t give into high-pressure tactics such as gifts, nagging phone calls, and limited-time offers.
- Verify any stated affiliations with senior organizations or government agencies. (Note: due to the high rate of senior trust scams, the AARP does not endorse ANY company that sells living trusts.)
- Know your rights under the FTC’s “Cooling Off Rule”. If you purchase a living trust in your home or any place other than the seller’s permanent place of business (such as a hotel seminar), you have three business days to cancel the deal.
For additional tips on how to avoid financial scams for National Consumer Protection Week, visit the government’s official website at ncpw.gov.
As a sandwich generation kid himself, Steve (Stephen M.) Worrall KNOWS the struggles you are facing as you raise children, balance the demands of your job, and take care of your aging parents, too! You can reach him at 770-425-6060 or firstname.lastname@example.org.
Many grandparents wish to leave a legacy behind for their grandchildren; however, they may run into some issues if those children are underage. A Cobb County Will and Trust lawyer can help you determine what the best options are for leaving assets to underage beneficiaries, whether those assets are held in a Will or Trust, financial accounts, or as part of a life insurance benefit.
Underage Beneficiaries in a Will or Trust
Cobb County Will and Trust lawyers will always ask their clients if any of their beneficiaries are underage, or even if they would like to keep younger beneficiaries from accessing their full inheritance until they’ve reached a certain age, which is usually 25. If the children are underage, an adult property guardian must be named since minors are not allowed to own property. If a significant amount of property is left to the minor, a Trust should be set up to manage the property until the child comes of age. In fact, Trusts can be used to ensure the minor only receives their full inheritance once they reach a certain age or milestone, such as graduating from college, while at the same time providing assets to make sure the child can achieve that milestone. A Marietta Wills and Trusts attorney can speak with you about leaving an inheritance to an underage child and will help you choose the best option for administering the distributions.
Underage Beneficiaries of Financial Accounts
Many people choose to make beneficiary designations directly on their financial accounts, such as savings accounts, annuities, and retirement plans. Cobb County Wills and Trusts attorneys urge their clients to carefully examine the details surrounding these beneficiary designations, as minor beneficiaries often cannot directly inherit assets after your passing. It is important to consult with a Cobb County Will and Trust lawyer to determine the best way for your underage beneficiaries to receive the inheritance you leave for them at the time when they can make informed financial decisions on their own. Directing the assets to a Will or Trust is often the best bet in these situations, but consulting with an attorney will give you a much better idea of how this should be done.
Underage Beneficiaries on Life Insurance
Many parents and grandparents name their children or grandchildren as beneficiaries on their life insurance policies. As with the cases above though, an adult guardian or a Trust must be named in order to hold the life insurance proceeds until the minors come of age. It is generally not advised to name minors as beneficiaries to life insurance policies, as courts will often appoint an adult to look after the proceeds until the child comes of age – and that adult may not be someone you would have wanted appointed to such a role. Speaking with a Cobb County Will and Trust lawyer may help you determine the best way to handle your life insurance beneficiary designations.
If you have any questions about the best ways to leave an inheritance to underage beneficiaries, please contact us at 770-425-6060 or email@example.com to set up a complimentary, no obligation Georgia Family Treasures Planning Session.
It’s become more and more common now to see clients come in with probate cases that need to be dealt with in multiple states. Many seniors today are “snow birds,” meaning they spend their winters in states with warmer climates while keeping their actual residency in the state they’ve spent most of their lives in. These seniors often own property in the state where they spend their winters, whether it’s real property like a vacation home or timeshare, or even tangible property like a car, boat, or financial account.
When the senior passes away, a situation is created where an out-of-state or ancillary probate proceeding must take place to administer the out-of-state property. Whatever the case may be, clients dealing with an out-of-state probate often need help since they are dealing with two or more sets of probate rules and regulations, all of which differ from state to state.
Cobb County probate lawyers find that one of the biggest issues involving an out-of-state probate proceeding is cost. Typically, you will need to pay probate court fees for each property held under a different probate court jurisdiction. In addition, you may be faced with extra accounting and legal fees. If possible, you should try to find an attorney who is licensed both in the home state of the deceased and the state where the ancillary probate is taking place. While the fees may be higher than usual due to multiple probate filings, it will still likely be cheaper than hiring more than one attorney to deal with property and assets in each respective state.
Another serious issue can arise if the decedent did not leave behind a Last Will and Testament. When this happens, the probate court will often order distributions of the estate based on the laws of intestacy. The problem with out-of-state probates is that every state has different laws of intestacy, meaning the heirs in one state may not be the same as the heirs in another. This is a very tricky situation and one where Marietta probate attorneys urge their clients to proceed with caution as it may cause additional stress for already grieving family members.
Are there ways to avoid an out-of- state probate proceeding? Yes, but it all depends on the state where the additional property is held since, as noted before, every state has different laws concerning probate. Some of the techniques Cobb County probate lawyers use to get around an out-of-state probate often involve placing the property into a revocable living trust, owning the property jointly with someone else, or drafting a type of deed where the property is transferred upon death.
However, Cobb County probate lawyers caution that this type of planning must be done BEFORE death, and attorneys must be consulted to make sure these techniques will actually work in the state where the property is held.
If you are currently dealing with the complexities of an out-of-state probate and need assistance, or you would like to plan ahead to avoid the possibility of an ancillary probate for your loved ones, please contact us at 770-425-6060 or firstname.lastname@example.org to set up a consultation.
Wills and trusts administration lawyers in Cobb County, Georgia, often have the opportunity to work with local families who—in addition to planning for their regular home—also have a vacation home to take into consideration during the planning process. While you might think that real estate prices or the vacation home’s location would be the driving forces behind putting it through the wills and trusts administration process, there are actually other, highly compelling reasons.
Vacation homes don’t just come with the baggage you pack to spend a family holiday on the lake, in the woods, or on the coast; they also come with a lot of emotional history. By working with a wills and trusts administration lawyer, those leaving the vacation home behind can take this history into consideration. They may be best served to really spend some time taking their heirs’ perspectives into consideration when determining how the home should be handled.
For some family members, the vacation home may be an important part of family history, full of memories and personal rites of passage. These folks might prefer that the property be safeguarded in some sort of trust or passed as-is to heirs in a will. On the other hand, there may be family members who are less emotionally attached to the home and see it as their parents’ investment in a stable financial future. These family members would be more inclined to sell the property and share the proceeds.
There are plenty of other aspects of the situation that the original owners would want to explore with a wills and trusts administration lawyer in Marietta GA. For example, would any potential heirs be financially able to maintain the property, pay taxes on it, etc? If not, then it may be time to consider either selling the vacation home or finding a means to fund the trust so it can meet these obligations.
Other thoughts to keep in mind:
- Do heirs live close enough to the vacation home to actually use it?
- Could you leave the vacation home to those who would most appreciate it and balance that with a different inheritance for others?
- Is there someone you could name as a trustee who could oversee the property on behalf of the trust?
- Would it be possible for some family members to buy others out of their portion of the property?
- Could the property be rented out when not in use by family members as a way to support its own upkeep?
Because there are so many variables that can come into play—money, grief, family tension, tradition, etc., etc., dealing with a vacation property during estate planning is something that is probably best done under the guidance of an experienced wills and trusts administration lawyer in Marietta.
For additional questions about estate planning or wills and trust administration in Georgia or to speak with a will or trust lawyer, contact our office at 770-421-0808 for assistance.
The short answer is: it depends.
This is a question we Marietta Guardianship Lawyers get a lot, and one we typically discuss at length with non-married parents during our planning sessions. When one of the parties of a divorce decree dies, this will end the custody agreement because there’s no longer anything to govern. In most cases, custody usually reverts to the surviving parent.
An exception to this is when one of the parent’s rights to the children has been terminated. If this is the case, third-parties, such as grandparents, may be allowed to intervene. Grandparents can also intervene if they believe the surviving parent is not able to care for the children. The burden of proof would fall on the grandparents to demonstrate that the surviving biological parent is unfit and that the best interest of the children would be better served by the third party having custody They would have to go through a lengthy custody proceeding that can be stressful on everyone – especially the children.
But, this can all be avoided…
The custodial parent can make it easier for grandparents (or other relatives) to step in after their passing with just a few estate planning steps. For starters, they can name an alternative guardian for the children in their will or trust. They can further explain their reasons for the nomination and why they believe the other parent is unfit.
Of course this doesn’t guarantee that the court will allow the guardianship, but it will certainly be a factor in the court’s decision. If the court approves the nomination of a guardian, it doesn’t sever the parental rights of the surviving parent; it simply states that the children will live with the nominated guardian instead.
The bottom line is that if you believe that your ex-spouse is not fit to raise your children, it is critical that you take the steps now to put an estate plan and guardian nominations in place that will be in the best interest of the kids should something happen to you. Call us now at 770-421-0808 to set an appointment with an experienced Marietta guardianship attorney if you need assistance getting started.
Let’s start off by saying that not all guardianships and conservatorships are bad. Guardianships and Conservatorships play a vital role in Georgia by allowing caretakers the means to make financial (Conservator of the Property) and health (Guardian of the Person) related decisions for those who are not able to do so any more and have no one else to speak for them.
Unfortunately, court-appointed guardianships and conservatorships are expensive, time consuming, and sometimes do not work out in the best interests of the ward or his or her family, so many estate planning lawyers are often asked to advise their clients about the best ways to avoid a conservatorship. The simple answer is that advanced planning can almost always keep a person’s affairs out of the probate court. The following are some of the tools estate planning attorneys use to ensure their clients have a say in who will handle their affairs for them when they are no longer able.
Power of Attorney
A Power of Attorney is a document that grants an agent authority to act on behalf of a person (the principal) in various financial matters, such as paying bills, buying and selling real estate, or even conducting business dealings. Either a Springing Power of Attorney (in effect only if the principal is incapacitated) or a Durable Power of Attorney (in effect even after the principal is incapacitated) could help avoid a Conservator of the Estate being appointed by the Probate Court, as an agent has already been designated to handle these financial decisions.
However, there have been some cases where the agent has been accused of mismanaging financial affairs or decides not to act as Power of Attorney, thus leading to conservatorship hearings. Estate planning attorneys advise their clients to choose someone who they can trust to handle their finances fairly, and to also be sure that the person being named on the document is aware of the situation and agrees to serve in that vital role.
Advance Healthcare Directive (Healthcare Power of Attorney)
The Advance Healthcare Directive is a document which lays out what type of medical care a person wants and who should make medical decisions for that person in the event of incapacity. Once again, the Health Care Agent should be someone who understands the importance of this role, can be assertive, and can be trusted to make important medical decisions on behalf of the principal. Otherwise, the Probate Court may have to appoint a Guardian of the Person.
Designation of Guardians and Conservators
Even if both the Power of Attorney and Advance Healthcare Directive documents fail in their intended purposes and a conservatorship must be put in place, either of those documents can help to ensure that a person is placed under the care of a conservator of their own choosing instead of someone appointed by the Probate Court. In either document, you can name the agents you would like to serve as either Conservator of your Property, or Guardian of your Person, or both. Your choice of Guardian or Conservator must be presented to the Probate Court during guardianship and conservatorship proceedings to inform the judge that you as the proposed ward made a decision, while you were of sound mind, to appoint specific people to these guardian and conservator roles. Estate planning lawyers find that Probate Court judges must appoint those named in the written nomination of guardian or conservator, as long as the statutory formalities of being in writing and witnessed by two adults have been followed. This kind of written nomination allows you, the proposed ward, to make your wishes known even if you are later incapacitated.
If you have any questions about how we can help avoid a guardaianship or conservatorship, please contact us at (770) 421-0808 to set up a Probate Process Planning Session. Mention you saw this blog post and the session is at no charge!
It’s not as complicated as it seems.
Protecting assets against loss is a common goal of estate planning. Asset protection trusts come in many different forms and can be used to protect property for the use and benefit of clients as well as their families and other beneficiaries.
What Is An Asset Protection Trust?
An asset protection trust is a special type of irrevocable trust in which the trust funds are held and invested by the Trustee and are only distributed on a discretionary basis. The purpose of an asset protection trust is to keep the trust assets secure for the beneficiaries instead of being exposed to loss to the beneficiary’s creditors, in a divorce or to predators.
Asset protection trusts come in two forms: (1) third party trusts; and (2) self-settled trusts. A third party trust is set up by one party for the benefit of another, while a self-settled trust is set up by one party for their own benefit.
Third Party Asset Protection Trusts Provide Inheritance Protection
Leaving an inheritance outright to a child or grandchild without any strings attached is risky in this day and age of high divorce rates, lawsuits and bankruptcies. There’s also the very real risk that an outright inheritance will be frittered away or end up in the hands of a spouse instead of in the hands of children or grandchildren. Finally, a beneficiary may be born with a disability or develop one later in life, creating a catch 22 whereby their inheritance is rapidly depleted by the expense of the disability but that same inheritancedisqualifies the beneficiary from receiving government help in paying medical and other bills.
There are a number of different types of third party asset protection trusts that clients can establish to ensure their hard earned money is used only for the benefit of their family:
- Trusts for minor beneficiaries – Minor beneficiaries can’t legally accept an inheritance. A trust for the benefit of the minor ensures that they will get the benefit of their inheritance.
- Trusts for adult beneficiaries – Adult beneficiaries who aren’t good with managing money, are in a lawsuit-prone profession, have an overreaching spouse, might get divorced or have an addiction problem, will benefit from a lifetime discretionary trust.
- Trusts for surviving spouses – Clients who are worried that a spouse wion’tt be able to manage their inheritance, will remarry or will need nursing home care, can provide that the spouse’s inheritance will be held in a lifetime discretionary trust.
- Trusts for disabled beneficiaries – Disabled beneficiaries who receive an inheritance typically lose their government benefits and have to spend the inheritance before re-qualifying. On the other hand, an inheritance left to a special needs trust can be used to supplement, not replace, government assistance and will not cause disqualification.
Planning Tip: Asset protection trusts designed for inheritance protection can be as flexible as the client chooses. For example, a beneficiary can be added as a co-trustee at a certain age or after the beneficiary reaches a specific goal, such as graduating from college. Another option is to name a corporate trustee, such as a bank or trust company, but give the beneficiary the right to remove and replace the corporate trustee with another one.
The client can also make trust distribution standards as limited or as broad as the client chooses. For example, the client can state that the funds can only be used to pay medical bills or for education, or the Trustee can be given broad discretion to make distributions in the best interest of the beneficiary. The client may also want to require the Trustee to take into consideration the beneficiary’s income and other assets before making distributions. Alternatively, the Trustee can be given the authority to deplete the trust in favor of the income beneficiary to the detriment of the remainder beneficiaries. If there are multiple beneficiaries, such as a trust for the benefit of a surviving spouse and children, the Trustee can be directed to give preferential treatment to one or more beneficiaries over the others.
Self-Settled Asset Protection Trusts Are the New Frontier
Until the late 1990s, self-settled asset protection trusts weren’t recognized in the United States. Prior to this period, a self-settled asset protection trust was required to be established outside the United States, often in an exotic place, such as the Cook Islands or the Cayman Islands. Then, in 1997, Alaska became the first state to recognize self-settled asset protection trusts, followed closely by Delaware. Since then, a handful of other states have enacted self-settled asset protection legislation in some form, bringing the current total to fifteen:
- Alaska – 1997
- Delaware – 1997
- Hawaii – 2010
- Mississippi – 2014
- Missouri – 2004
- Nevada – 1999
- New Hampshire – 2009
- Ohio – 2013
- Oklahoma – 2004
- Rhode Island – 1999
- South Dakota – 2005
- Tennessee – 2007
- Utah – 2013
- Virginia – 2012
- Wyoming – 2007
A properly formed and operated domestic, self-settled asset protection trust generally permits a person to transfer their own assets into the trust and retain a beneficial interest in the assets while denying their creditors access to the trust assets. While the self-settled asset protection trust laws of these states vary widely, in general they require the trust to be irrevocable, at least one trustee to be a state resident or a corporation authorized to do business in the state and some trust assets be located in the state. From there, the self-settled asset protection trust laws differ on “exception creditors” (creditors who can still access the trust assets, such as an ex-spouse who is owed alimony or a child who is owed child support) and statutes of limitation with regard to preexisting and future creditors (1.5 years to 6 years).
Planning Tip: Clients needs to be aware that there are only a limited number of U.S. cases interpreting domestic asset protection statutes. Self-settled domestic asset protection trust planning is still developing. Nonetheless, when layered with other types of asset protection planning, including liability insurance, third party asset protection trusts and limited liability entities, domestic self-settled asset protection trusts offer another tool in the planner’s toolbox designed to put up roadblocks between the client’s assets and creditors.
This article is courtesy of WealthCounsel, a community of over 4,000 trusts and estates attorneys with a common goal to practice excellence. To learn more, visit wealthcounsel.com.
Putting together a solid estate plan with your Atlanta will and trust lawyer is an important step in protecting the future of yourself and your family. In order to make sure that things go the way you’ve planned, it’s a good idea to occasionally double check who you have listed on your IRA beneficiary form.
In order to keep things in line with your estate plan, remember that the beneficiary designation form may be the final voice on who gets your IRA. That can happen, even if you and your estate planning lawyer have rewritten your will. (Yes, the designation form can outrank your will!) If you’ve had a change in your relationship with the person you previously designated, you’re going to want to get that form changed.
This isn’t the only problem your will and trust lawyer in Atlanta might be able to identify when it comes to the beneficiary designation form. For example, it’s actually pretty common for individuals to not even know where that form is, despite the fact that their IRA may be the most valuable thing they’re planning to leave behind. If you haven’t seen a copy of your form in awhile (or ever), you or an Atlanta estate planning lawyer need to contact the IRA administrator and get a copy to keep somewhere appropriate.
When you get that copy, take the time to review it. You may see that plenty has changed since you set up your IRA. Children, divorces, spouses, and even grandchildren may have come into play since that time. Along those lines, if you’ve lost a child but want to ensure that his or her family receives a portion of your IRA, you will need to list them on the form because a deceased child cannot inherit. In fact, anytime a beneficiary has passed away, it will affect your estate. You can make this a little less of an issue by making sure to name backup beneficiaries.
If one or more of your beneficiaries is under the age of 18, your Atlanta will and trust lawyer may advise you to use the IRA to fund a trust instead. This will give you a whole lot more say in how the money gets used. In fact, even if you are leaving it to someone older, a trust still might be the way to go for several compelling reasons.
These are just a few of the complications that can come along with not properly designating beneficiaries for your IRA. There are others that might come into play, as well, and an Atlanta will and trust lawyer should be able to go through them with you to create the best plan possible.
While it doesn’t happen in real life as often as it does in the movies and on soap operas, Marietta GA wills and trusts lawyers do sometimes have to deal with a contested will. Wills and trusts are created in order to ensure that a deceased’s wishes are followed, as well as for the financial benefit of heirs. Additionally, they are often used to protect minor children or those with special needs.
When a will is contested, it’s usually by someone who feels that property left to the will or trust was not bequeathed appropriately. In the case of children, someone may feel he or she is a better-suited guardian than the one a parent named. It’s up to the Marietta wills and trusts lawyer to help ensure that the decedent’s wishes are carried out. This may boil down to refuting claims made by others, but the most important job is to set the will or trust up properly to begin with.
When Can Someone Contest a Will?
There are several reasons that a will can be legitimately contested:
- The decedent didn’t understand the choices he or she was making
- There is a mistake in the will
- It wasn’t properly executed (witnessed, etc.)
- The decent was unduly pressured by someone else
Contesting a will is not easy. Wills and trusts lawyers in Marietta and Cobb County do everything they can to make sure their client’s wishes are outlined according to the letter of the law in order to avoid just such a scenario. It’s also possible for a testator (the person making the will) to include a no-contest clause. The clause clearly indicates that anyone who contests the will forfeits their inheritance. This isn’t a 100% guarantee that no one will contest it, but it does offer some incentive to better follow your wishes. A Marietta Georgia wills and trusts lawyer can work with you to determine if this kind of clause might be beneficial.
When Can Someone Not Contest a Will?
There are reasons to contest a will, but “I don’t like what it says” is not one of them. An individual isn’t allowed to simply drag everyone into court to change a will because he or she isn’t happy with the way the property has been distributed. So, if your sister thinks she should have gotten your mother’s ring, but you left it to your daughter, the sister doesn’t have grounds to contest the will. Additionally, only someone with a direct financial interest is allowed to contest it. That means that a son-in-law cannot contest a will because he thinks his wife was treated unfairly.
Avoiding the Issue Altogether
The best approach, of course, is to work with an experienced Marietta wills and trusts lawyer who can set things up properly from the very beginning. The estate plan should be comprehensive and not leave room for ambiguity to be exploited later. Likewise, the attorney will make sure that each aspect of the process complies with applicable laws. As for the testator, there are things he or she can do to reduce the likelihood of a will being contested, one of the most important of which is to share what the will says and what your reasons are with beneficiaries before you pass away. This leads to less surprises later and also provides a better understanding of the decisions you have made.
DID YOU KNOW…
That if you were to pass away or become incapacitated while your child is at school, the authorities may not release your kids to those you listed on the school emergency card?
Because by law, the authorities can only leave your kids with their “legal guardian” or surviving parent if something happens to you.
If the surviving parent is unavailable or something happens to you both during school hours, your child will may possibly be placed into the care of social services until a judge (who doesn’t know you or your wishes!) should decide where they should go.
That is NOT a position you want to put your kids in—especially during a time of grief!
Fortunately, putting a plan in place to make sure your kids are protected if something happens to you is EASY!
Here’s a brief checklist to help you “get your ducks in a row” before the school year starts:
- Have I legally documented short and long-term guardians to care for my kids if something happens to me and/or my spouse during school hours?
- Do the people I listed on my child’s school emergency card match those I’ve legally named as guardians? (If not, your emergency contacts will only have permission to pick your kids up if they are sick – not care for them if something happens to you).
- Have I provided my chosen guardians with the documentation they need and instructions on what to do if called upon in an emergency situation?
- Have I prepped the babysitter who watches my child either before school or after school on what to do if something happens to me so child services are not called in?
If you answered “no” to any of these questions, now is the perfect time to get a plan in place before the hustle and bustle of school season starts!
Just call me, Cobb County family lawyer, Steve Worrall. As a dad and a lawyer I am passionate about ensuring young families protect their children. Call 770-425-6060 and ask to schedule a Georgia Family Treasures Planning Session at no charge (up to $750 value) and get $250 off your plan (any one of our 3 levels of planning packages) with the mention of this “Back to School” Article.
Together we’ll legally document your choice of guardians and create a plan that ensures your kids are cared for by the people YOU want if the unthinkable happens.