Often people don’t want their estate to go through probate, even when they only own one piece of real estate (usually their residence). They don’t want to pay the high cost of having a Revocable Living Trust created for them. They’ve been warned about the perils of holding title to property in joint names with anyone other than a spouse.

What can they do then?

Then, the next best thing is to have your property pass to your chosen beneficiary outside of probate by a proper title on the real estate. Most states now allow the use of what’s known as a “Beneficiary Deed.”

The property title is still in your name. However, the deed instructs the title to pass to a named beneficiary, only upon your death. This by-passes probate. This eliminates the worries about joint ownership with anyone other than a spouse causing a claim against or even the loss of property in the event of a debt.

Using this form of deed is better than doing nothing, or creating a joint ownership with a non-spouse. But remember this type of transfer may still subject the property to probate in the event of a prior death of your beneficiary, or if you should both die in a common disaster. A Revocable Living Trust remains the best answer.

Sometimes you can learn more from a letter to the editor than from an all day seminar about the same subject. I just love the following letter to the editor copied from an Arizona Newspaper:

Editor:

In his recent column offering legal comment as a supposed public service, (a Phoenix Lawyer) candidly acknowledges that much of the public’s animosity toward lawyers derives from the skinning that a deceased person’s heirs receive in the probate process.

Amen to that sentiment. I have recently endured the process of settling a simple, solvent estate of relatively small size and with only one heir, and I was mulcted of nearly $10,000 in attorneys’ fees.

I invite those who would fancy a protracted adventure into the Byzantine complexities of the law to have a go at probate if they would see the legal process at its larcenous worst.

What (the attorney) could have told his legally naive readers is that . . . one can have a so-called living trust drawn and thereby avoid virtually all the preposterous make-work flapdoodle of a probated will.

The trust is easy, quick and cheap; and moreover, it is private and avoids the needless spreading of a dead loved one’s personal business affairs throughout the courthouse records.

Signed, Hole N. Wallet, M.D. (the name was changed to protect the antogonist doctor from reciprocation by a medical malpractice lawyer).

This came up just this morning at the office. A client wants to give a portion of his interest in an investment to his children. He wants to put the title in the children’s names. The asset is actually an interest in a Family Limited Partnership. Two of these children are minor children. I told him, “Don’t do it.”

If you have children who are under the age of 18, they are minors. As far as the law is concerned they are incapacitated. They don’t have the legal capacity to enter into a legally binding contract. If you put something of value in the name of your minor child, then who really owns it? The child can’t. This opens up a can of worms.

When you want your children to own something of value, you should name someone to act on their behalf and have them own the asset in a trust. Preferrably an irrevocable children’s trust. As their guardian you can also be the trustee of their irrevocable children’s trust. The trust owns the asset. You control it on their behalf.

In this case, I recommended that the client establish an irrevocale children’s trust. He can be the trustee. He still controls the asset.

The Children’s Trust has a new taxpayer identification number, so the income from the child’s share is reported for tax purposes as if it were the child’s. It’s passed through to the child and he would pay tax on it at his current tax rate. His tax rate is presumably lower than the parent’s. So it may save some tax.

The asset is owned by the Children’s Trust. It will not be subject to any claim, lawsuit, judgment or demand to the parent, as it would be if the parent still owned it.

The asset is not in the parent’s estate. If the parent should die, there is no transfer to be made. The Children’s Trust has a successor trustee. This person would then control the asset for the benefit of the child.

This asset now is effectively owned by the child. Because it is in the Trust it is protected from judgments, lawsuits, creditors and lpredators. It is taxed at a lower rate than if it were owned by the parents. And will not be subject to probate upon the death of the parents.

Irrevocable Children’s Trusts are the most underutilized asset protection and estate planning tool around.

Everyone knows how important it is to be able to make decisions regarding your health care. But what happens if you are unable to make your own health care decisions? Can someone else make them for you?

Yes, but only if you have appointed someone to be your health care agent or issued a health care power of attorney. Together with this appointment you should also specify your wishes by writing out some “Health Care Directives.”

The National Academy of Elder Law Attorneys has issued this following news bulletin to remind people to name their health care agent in writing:

News
1. National Health Care Decisions Day is April 16
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Despite recent gains in public awareness of the need for advance care planning, studies indicate that most Americans have not exercised their right to make decisions about their healthcare in the event that they cannot speak for themselves. The National Healthcare Decisions Day event will help Americans understand that making future healthcare decisions includes much more than deciding what care they would or would not want; it starts with expressing preferences, clarifying values, identifying care preferences and selecting an agent to express healthcare decisions if patients are unable to speak for themselves. The National Healthcare Decisions Day (NHDD) initiative is a collaborative effort of national, state and community organizations committed to ensuring that all adults with decision-making capacity in the United States have the information and opportunity to communicate and document their healthcare decisions.

If you haven’t yet done so, decide you will now put your Health Care Power of Attorney and Health Care Directives in place. Don’t delay-do it today.

I used to get irritated when I would see an attorney’s letterhead describing the service as “attorney and counselor at law.” Isn’t that redundant. It seemed to be the height of self-importance or egocentricity. “Why would you need to describe yourself as both an attorney and then as a counselor at law?” I would ask myself.

Now more than ever perhaps both appellations are appropriate. An attorney is defined as a person who practices law, a counselor, a lawyer, or even sometimes an ambulance chaser. A counselor is defined as someone who gives counsel, or an advisor. Now more than ever, I believe the role of advisor or counselor is needed.

On the radio or TV these days we are bombarded with blaring commercials who guarantee us that this or that company has the appropriate legal forms for you to provide the documentaion you need to start a business, incorporate, file an LLC, prepare a will or a trust, file for bankruptcy, or obtain a trademark.

I believe these companies may have very good documents. After all the company was started by “top attorneys.” And the law will back you up, they declare.

But what if you don’t know the difference between incorporation and starting a new business or filing an LLC? What if you don’t know the difference between a will or a trust, or a patent or a trademark? And more important, what if you don’t know what you don’t know?

That’s when you need the other appellation for attorney. That’s when you need the counselor or legal advisor. Your choice between a corporation and an LLC taxed as a small business corporation may make all the difference in the world when it comes to your business success. Your legal advisor, your attorney and counselor at law, may make all the difference to you.

So now I am reconsidering the combined use of the words attorney and counselor at law. Maybe you do need both. Often “the laborer is worthy of his hire.”