A client came into my office last week with her daughter; I’ll call her Mrs. Smith. Mrs. Smith, who is in her mid seventies, asked if I could help her sort out the trouble she is having with her finances. She has a trust and several other documents which an attorney and a financial advisor sold to her, but she doesn’t really understand how they work. She said that ‘no one would talk to her’ about her trust without billing her for every moment they spoke with her. She doesn’t want to have her money tied up like that, but she was told that she can no longer reach her own funds.
Looking through her papers, Mrs. Smith has a trust that was drafted in 2013 and one that was drafted in 2015. She has a Last Will & Testament that was drafted in 2009, 2012, 2013 and 2015. Each of these wills work hand-in-glove with each trust. She has no idea why she needed new Wills or new trusts.
The executor of her Last Will & Testament is her nephew who lives four hours away, although she told me that she preferred that it be her daughter. The alternate executor of her Will is the attorney who drafted the documents for her. The trustee of her Trust is the same, with the drafting attorney filling that role. She told me that she wanted her daughter as her first choice and her nephew as the second choice. The attorney was persuasive and helped her change her mind.
For a number of years, Living Trusts, both Revocable and Irrevocable, have been sold to clients who do not need a trust. These are clients who want to protect their assets and are sold a bill of goods which they neither understand or need. Don’t get me wrong; trusts are fine, when used properly. We draft trusts on a regular basis.
Trusts are not, however, a one-size-fits-all answer to every estate planning need. Professionals who create trusts for clients who do not need them, raise the question of who that attorney is serving; the client or themselves. The attorney raises further questions when they appoint themselves as an executor or a trustee. There are rare occasions when an attorney will serve in this capacity. When trusted family or friends are available, there needs to be a good reason to call on the attorney to fill these roles.
I have work to do for Mrs. Smith to determine what, if any, use I can make of these trusts. Investigation, research, and time will tell what changes are necessary. Stay tuned.