Removing a Trustee Due to Incapacity

April 21, 2025

A trustee is responsible for managing and distributing assets according to the terms of a trust. However, when a trustee becomes mentally or physically incapacitated, they may no longer be able to fulfill their legal and fiduciary responsibilities. In such cases, the beneficiaries or co-trustees may need to take steps to remove the incapacitated trustee and appoint a capable replacement. Removing a trustee due to incapacity is a sensitive legal matter. It requires careful planning and adherence to the terms of the trust.

Understanding the process and potential challenges can help protect the trust and ensure that assets continue to be appropriately managed.

Identifying Signs of Trustee Incapacity

A trustee’s incapacity is typically related to cognitive decline, physical illness, or other conditions that prevent them from effectively managing the trust. Common signs that a trustee may no longer be fit to serve include:

Forgetting important financial obligations or failing to distribute assets as required
Making poor financial decisions that jeopardize the value of the trust
Neglecting record-keeping responsibilities, leading to missing or inaccurate financial reports
Becoming unresponsive to beneficiaries or failing to communicate about trust matters
Receiving medical diagnoses, such as dementia or severe physical impairments, that prevent them from fulfilling their duties

Incapacity can be gradual or sudden, so it is crucial to monitor the trustee’s ability to manage the trust effectively and act when necessary.

Reviewing the Trust Document for Removal Provisions

Most well-drafted trusts include guidelines for removing a trustee in the event of incapacity. These provisions often specify:

Who has the authority to remove a trustee (e.g., beneficiaries, co-trustees, or a trust protector)
What evidence is required to prove incapacity, such as a physician’s certification or court determination
The process for appointing a successor trustee to take over management responsibilities

If the trust document clearly outlines removal procedures, the process can be relatively straightforward. However, if the document does not specify incapacity procedures, court intervention may be required.

Seeking Medical and Legal Evidence of Incapacity

In cases where a trustee’s incapacity is disputed, gathering medical and legal evidence is necessary. This often includes:

Medical documentation from a licensed physician stating that the trustee is no longer capable of making financial decisions
Statements from beneficiaries or co-trustees detailing instances of mismanagement or neglect
Court petitions, if necessary, to legally establish the trustee’s incapacity and authorize their removal

Having clear documentation can prevent unnecessary legal disputes and ensure a smooth transition of trustee responsibilities.

Initiating the Removal Process

If the trust document provides a process for removal, the first step is to follow the outlined procedures. This may involve notifying the incapacitated trustee, obtaining required medical opinions and formally naming a successor trustee.

If no removal process is specified in the trust, the beneficiaries or co-trustees may need to file a petition in probate court to request judicial intervention. The court will review medical evidence, evaluate the trustee’s condition, and determine whether removal is in the best interest of the trust and its beneficiaries.

Appointing a Successor Trustee

After the incapacitated trustee is removed, a new trustee must be appointed to manage the trust. The trust document typically designates a successor trustee. However, if no successor is named, the beneficiaries or the court may need to appoint one.

Choosing a responsible and qualified individual or corporate trustee ensures that the trust remains properly managed and continues to serve its intended purpose.

Preventing Future Issues with Trustee Incapacity

Removing a trustee due to incapacity is never easy. To avoid future complications, it is essential to include clear incapacity provisions in a trust. These provisions should outline who has the authority to remove a trustee, what documentation is required and the process for appointing a successor.

Families can also consider appointing co-trustees or a trust protector who can step in if the primary trustee becomes incapacitated. Taking these steps ensures that the trust remains in capable hands and that assets are protected for beneficiaries. If you would like to learn more about the role of the trustee in estate planning, please visit our previous posts.

Reference: ACTEC Foundation (January 2024) “Practical Considerations in Dealing with Incapacity”

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Tell Designated Representative Where to Access Your Estate Planning Documents

April 15, 2025

Estate planning ensures that your assets, medical decisions and financial affairs are handled according to your wishes. Those plans can only be carried out if your designated representative—whether an executor, trustee, or power of attorney—knows where to access critical documents. If estate planning materials are lost, misplaced, or inaccessible, it can create confusion, legal delays and unnecessary stress for your loved ones. Taking the time to securely store your plan and tell your designated representative where to access your estate planning documents ensures that your estate plan functions as intended when the time comes.

Why Document Accessibility Matters

Many families assume that having a will or trust in place is enough. However, if those documents cannot be located, probate courts may default to intestacy laws, meaning assets could be distributed in a way that contradicts your wishes. Similarly, if a healthcare proxy or financial power of attorney cannot be found in an emergency, your designated representative may be unable to make urgent decisions on your behalf.

Common problems arise when:

Family members are unaware that estate planning documents exist
Digital copies are stored without providing access credentials
The original signed documents are locked away in a place no one can reach
The wrong version of a will or trust is used because outdated copies were not replaced

Avoiding these pitfalls requires proactive planning and clear communication with the individuals responsible for managing your estate.

Where to Store Estate Planning Documents

Estate planning documents should be secure yet accessible to those who will need them. Some of the best storage options include:

A fireproof and waterproof home safe – Provides security while allowing easy access for trusted individuals
A safe deposit box at a bank – Offers high security but may require legal documentation to access after death
With an estate planning attorney – Ensures documents are professionally stored and available when needed
Secure digital storage – Online vaults or encrypted cloud storage can provide a backup. However, access credentials must be shared

The chosen storage location should be clearly communicated to the executor, trustee, or agent named in your estate plan to prevent any complications.

Documents to Keep Readily Available

While some documents, such as property deeds or financial statements, may not require immediate access, others are time-sensitive and should be readily retrievable. Key estate planning documents include:

Last Will and Testament – Guides asset distribution and executor responsibilities
Revocable or Irrevocable Trust Documents – Directs how assets in a trust are managed and distributed
Power of Attorney Forms – Authorizes financial decisions in case of incapacity
Healthcare Proxy or Medical Power of Attorney – Grants decision-making authority for medical care
Advance Directives (Living Will) – Outlines medical treatment preferences
Insurance Policies and Beneficiary Designations – Ensures quick access to life insurance claims
Funeral and Burial Instructions – Prevents family disputes and provides clarity on end-of-life wishes

Providing copies or access to these documents ensures that designated representatives can act swiftly when needed.

How to Inform Your Designated Representative

Choosing someone to manage your estate and medical decisions is a crucial part of estate planning. However, they must be properly informed about their role. Have a conversation to discuss:

The responsibilities and expectations of their position
Where estate planning documents are stored
Who else should be involved in financial or medical decisions
The process for updating or modifying documents in the future

If digital records are used, ensure that you share any necessary login credentials or security codes to prevent access issues. Many people choose to provide their attorney or executor with copies of their estate documents, ensuring that the most up-to-date versions are readily available. Telling your designated representative where to access your estate planning documents will give you and your loved ones the peace of mind knowing that your planning will be addressed properly. If you would like to learn more about the role of the executor, or trustee, please visit our previous posts.

Reference: Charles Schwab (Jan. 21, 2025) “How to Store Estate Planning Documents”

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The Estate of The Union Season 4|Episode 2 is out now!

April 10, 2025

The Estate of The Union Season 4|Episode 2 is out now! In this episode of the ESTATE OF THE UNION, Brad Wiewel is going to discuss gifting to grandchildren – is it a blessing or a curse?

As a great general rule, people who have grandchildren are entranced by them! They typically have plenty of photographs to share and stories to tell. These kids are perfect and always will be – right?

In this edition of the Estate of the Union bought to you by Texas Trust Law, Brad Wiewel has some advice for grandparents which may seem to be contrary to the general idea that making substantial gifts to those adorable grandkids is always the right and proper thing to do. Maybe Brad is getting a little bit jaded as he ages, or maybe his advice is worth considering – you get to decide! Is gifting to grandchildren a blessing or a curse?

In each episode of The Estate of The Union podcast, host and lawyer Brad Wiewel will give valuable insights into the confusing world of estate planning, making an often daunting subject easier to understand. It is Estate Planning Made Simple! The Estate of The Union Season 4|Episode 2 is out now! The episode can be found on Spotify, Apple podcasts, or anywhere you get your podcasts. If you would prefer to watch the video version, please visit our YouTube page. Please click on the links to listen to or watch the new installment of The Estate of The Union podcast. We hope you enjoy it.

Texas Trust Law focuses its practice exclusively in the area of wills, probate, estate planning, asset protection, and special needs planning. Brad Wiewel is Board Certified in Estate Planning and Probate Law by the Texas Board of Legal Specialization. We provide estate planning services, asset protection planning, business planning, and retirement exit strategies.

Managing Inherited Property can be Complicated

April 1, 2025

When a loved one passes away, their home is often one of the most significant assets left behind. However, managing an inherited property can be complicated, involving legal procedures, financial obligations and potential family conflicts.

Knowing what steps to take can help heirs navigate the probate process, handle property expenses and decide whether to sell, rent, or keep the home.

Understanding Probate and Property Transfers

1. Determining Ownership and Title

Before making any decisions, confirming who legally owns the property is essential. Ownership depends on:

Whether the deceased had a will or trust specifying beneficiaries
The state’s inheritance laws if no will exists (intestate succession)
Whether the home was jointly owned by a surviving spouse or co-owner

If the property is included in a will, it must go through probate before transferring it to heirs. However, probate may not be necessary if it was placed in a living trust or owned jointly with survivorship rights.

2. Navigating the Probate Process

If the home is subject to probate, the executor of the estate is responsible for:

Filing legal documents to initiate probate
Paying outstanding debts and property taxes before distributing assets
Determining if the house must be sold to settle debts or be transferred to heirs

Probate can take months or even years, depending on the complexity of the estate. If multiple heirs inherit the home, they must agree on how to proceed with the property.

Financial Responsibilities of Inheriting a Home

1. Covering Mortgage and Property Expenses

If the home still has a mortgage, the heir must continue making payments or risk foreclosure. Other financial obligations include:

Property taxes and homeowner’s insurance
Utility bills and maintenance costs
Homeowners’ association (HOA) fees, if applicable

If the deceased had a reverse mortgage, the estate may need to sell the home or pay off the loan before inheriting it.

2. Selling vs. Keeping the Home

Once ownership is settled, heirs must decide whether to:

Keep the home – Ideal if a family member plans to live in it or use it as an investment.
Sell the property – A common choice to divide assets among heirs and cover expenses.
Rent the home – Provides an income stream but requires property management.

A legal dispute may arise if multiple heirs inherit the home but disagree on what to do. Having a clear estate plan can help prevent these conflicts.

Steps to Take When Managing an Inherited Home

Secure the Property – Change locks, check for damages and notify homeowners insurance of the owner’s passing.
Review Debts and Expenses – Determine if the home has outstanding loans, unpaid taxes, or liens.
Get a Home Appraisal – Assess the market value to guide selling, renting, or estate distribution decisions.
Settle Ownership and Probate Issues – Work with an attorney to transfer the title to heirs or sell the property.
Decide on Next Steps – Weigh financial and personal factors before keeping, selling, or renting the home.

Get Legal Guidance for Managing an Inherited Home

Managing an inherited property can be complicated, requiring careful legal and financial planning. Whether you need to navigate probate, resolve title issues, or explore selling options, and experienced estate planning law firm can help ensure a smooth transition. Id you would like to learn more about inherited property, please visit our previous posts.

Reference: AllLaw (Aug. 03, 2022) “Transferring Real Estate After Death”

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What If a Beneficiary Dies Before Receiving an Inheritance?

February 27, 2025

Estate plans are designed to distribute assets according to the wishes of the deceased. So what if a beneficiary dies before receiving an inheritance? Complications arise when a named beneficiary dies before receiving their inheritance. Depending on the terms of the will, the existence of a contingent beneficiary and state probate laws, the inheritance may be reassigned, redirected, or absorbed back into the estate.

Factors that Determine What Happens to Inheritance

Many well-prepared estate plans account for the possibility of a beneficiary predeceasing the testator (the person creating the will). These plans typically include contingent beneficiaries, who receive the inheritance if the primary beneficiary is no longer alive.

1. Does the Will or Trust Have a Contingency Plan?

For example, if a will states:
“I leave my home to my son, John, but if he predeceases me, the home shall pass to my granddaughter, Sarah.”

In this case, Sarah, the contingent beneficiary, would inherit the home. The inheritance may follow default legal rules if no contingent beneficiary is named.

2. The Role of Anti-Lapse Laws

Many states have anti-lapse statutes that automatically redirect an inheritance to the deceased beneficiary’s descendants if no alternate beneficiary is named. These laws prevent an inheritance from becoming part of the residual estate.

For instance, if a father leaves an inheritance to his son, but the son dies before him, an anti-lapse statute may ensure the son’s children receive the inheritance instead. However, these laws typically apply only to direct family members, such as children or siblings, and may not cover more distant relatives or unrelated beneficiaries.

3. How Trusts Handle a Beneficiary’s Death

If an inheritance is placed in a trust, the trust document will govern what happens when a beneficiary dies. Many trusts name successor beneficiaries to take over the deceased beneficiary’s share.

For example, in a revocable living trust, assets may be divided among multiple children, with instructions that if one child dies, their share passes to their own children (the grantor’s grandchildren). If no successor beneficiary is named, the assets may be distributed according to the trust’s default terms or state law.

4. What Happens If No Contingent Beneficiary Exists?

If a deceased beneficiary was the sole heir and no contingent beneficiary is named, the inheritance may return to the estate’s residual beneficiaries – those who inherit any remaining assets after specific bequests are made. If no such beneficiaries exist, assets are typically distributed according to intestacy laws, which vary by state.

Under intestacy laws, assets are generally distributed to the deceased’s closest living relatives, such as spouses, children, or siblings. The estate may eventually escheat to the state if no heirs can be located.

5. Special Considerations for Spouses and Joint Ownership

Jointly Owned Property with Survivorship Rights: This property type automatically transfers to the surviving co-owner if one owner dies. This often applies to real estate, bank accounts, or investments held as joint tenants.
Community Property Laws: In certain states, these laws may influence how a deceased spouse’s assets are distributed. If the deceased beneficiary was a spouse, their estate share may follow marital property laws.

Steps Executors Should Take If a Beneficiary Dies

If a named beneficiary passes away before receiving their inheritance, the estate executor must:

Review the will or trust to determine if a contingent beneficiary is named.
Check state anti-lapse laws to see if the deceased beneficiary’s children or heirs inherit their share.
Identify residual beneficiaries if no direct heirs are listed.
Distribute the inheritance accordingly, either to another named beneficiary or through intestate succession.
Consult a probate attorney if the estate’s distribution remains unclear or disputed.

How to Prevent Issues in Your Estate Plan

To avoid complications when a beneficiary dies before receiving their inheritance, consider these estate planning best practices:

Regularly update your will or trust to reflect changes in family dynamics.
Name contingent beneficiaries for all major assets to ensure a clear inheritance path.
Use a trust to create structured distributions that automatically account for beneficiary changes.
Review state laws to understand how anti-lapse statutes and intestacy rules may impact estate distribution.

Ensuring a Smooth Transition

An estate plan should be flexible enough to adapt to life’s uncertainties, including the unexpected passing of a beneficiary. By including clear contingencies and understanding inheritance laws, you can ensure that assets pass efficiently to the intended heirs without unnecessary legal challenges. If you would like to learn more about beneficiaries, please visit our previous posts.

Reference: SmartAsset (June 21, 2023) “What Happens to an Inheritance If a Beneficiary Has Died?”

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Leaving Inheritance to a Child with Addiction requires thoughtful Planning

January 30, 2025

Leaving an inheritance to a child with addiction requires thoughtful planning to balance their needs with potential risks. Addiction can compromise a person’s ability to manage finances responsibly, increasing the likelihood of misused funds or exacerbating harmful behaviors. By implementing tailored estate planning strategies, parents can protect their children, while ensuring their legacy is used constructively.

Challenges of Leaving a Lump Sum Inheritance

Directly transferring a lump sum inheritance to a child with addiction poses significant risks. The sudden availability of large amounts of money can intensify addictive behaviors, leading to financial instability, strained family relationships and even legal troubles.

In addition, addiction often results in a lack of financial literacy or accountability, making it difficult for the individual to manage their inheritance responsibly. Parents must consider these challenges when planning their estate to ensure that the inheritance is a source of support rather than harm.

Estate Planning Strategies to Protect a Child with Addiction

A trust is one of the most effective tools for managing an inheritance for a child with addiction. Parents can appoint a trustee to oversee distributions and ensure that the funds are used responsibly by creating a discretionary trust.

The trustee, often a professional or trusted family member, can manage payments for essential needs like housing, education, or treatment. This arrangement provides financial stability, while minimizing the risk of misuse.

Include Incentives

Incentive trusts encourage positive behaviors by linking distributions to specific milestones or achievements. For example, a trust might provide additional funds if the beneficiary completes a rehabilitation program, maintains stable employment, or avoids legal troubles.

By structuring the trust this way, parents can promote recovery and self-sufficiency, while ensuring the inheritance aligns with their child’s best interests.

Use Spendthrift Provisions

Spendthrift provisions limit the beneficiary’s access to the trust’s funds, protecting the assets from creditors, lawsuits, or impulsive spending. This legal safeguard is particularly valuable for individuals with addiction, as it prevents external pressures or poor decision-making from depleting the inheritance.

Consider Lifetime Gifting

For parents who prefer to provide financial support during their lifetime, lifetime gifting allows them to contribute smaller, manageable amounts. This approach enables them to monitor how their child uses the funds and adjust future support based on their child’s progress and needs.

Collaborate with Addiction Professionals

Involving addiction specialists or financial therapists in the planning process can help parents design an inheritance strategy tailored to their child’s specific challenges. These professionals can offer guidance on treatment resources, behavioral incentives and effective trust structures.

Communicating the Plan

Open communication about the estate plan can help manage family expectations and reduce potential conflicts. While discussing addiction and inheritance may be difficult, transparency fosters understanding and ensures that other family members are aware of the reasoning behind specific decisions.

Parents should also document their intentions clearly in the estate plan to prevent disputes among heirs. Including a letter of intent can provide additional context and convey the love and support behind the decisions.

The Role of Professional Guidance

Leaving an inheritance to a child with addiction requires thoughtful planning. Working with an estate planning attorney is essential to navigating these complexities. Attorneys can help draft trusts, incorporate spendthrift provisions and ensure that the plan complies with legal requirements. Their expertise ensures that the inheritance strategy aligns with the family’s goals, while protecting the child’s long-term well-being. If you would like to learn more about inheritance planning, please visit our previous posts.

Reference: The Guardian (June 19, 2010) “Experience: I blew my million dollar inheritance”

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Navigating Probate for Out-of-State Properties can be Complex

January 29, 2025

Navigating probate for out-of-state properties can be complex. Property outside the deceased’s home state requires additional steps, often involving separate probate processes, known as ancillary probate. This process can be complex and time-consuming for beneficiaries, so knowing how to avoid and manage it is essential.

Understanding Ancillary Probate

Ancillary probate is a secondary process required when a decedent owns real estate in a different state from where they resided. Each state has its own probate rules, and ancillary probate ensures that local laws govern property transfer within that state. This process involves additional court proceedings, paperwork and, often, hiring an attorney licensed in that state.

The necessity of ancillary probate can complicate estate settlement, leading to delays and added legal fees. However, understanding how this process works and planning accordingly can help streamline property transfer and reduce administrative burden for beneficiaries.

Drawbacks of Out-of-State Probate

Out-of-state probate can be particularly burdensome for estate executors and beneficiaries. Key challenges include:

Time and Expense: Ancillary probate can take months or even years to resolve, especially if multiple properties are involved. This can delay property transfers and increase expenses, from court costs to attorney fees in each state.
State-Specific Rules: Each state has probate requirements, and navigating unfamiliar regulations can be difficult. These complexities often necessitate hiring local legal assistance, further increasing costs.
Potential for Disputes: With multiple jurisdictions involved, disputes are more likely to arise, complicating property transfers and causing additional delays.

Recognizing these challenges early can help estate planners and executors find ways to avoid or mitigate the effects of ancillary probate.

Solutions to Avoid Ancillary Probate

Once you realize that you’re at risk of ancillary probate, the next step is implementing strategies to avoid it. Thankfully, there are several ways that you can keep your property out of ancillary probate.

Transfer Property Ownership with a Revocable Living Trust

One of the most effective ways to avoid ancillary probate is to transfer real estate ownership into a revocable living trust. By placing property into a trust, the owner maintains control over the asset during their lifetime. Upon their passing, the trust facilitates the property’s transfer directly to beneficiaries, bypassing the need for probate altogether. Trusts are also adaptable, allowing the owner to make changes as needed during their lifetime.

Establish Joint Tenancy with Right of Survivorship

Another strategy for avoiding ancillary probate is establishing joint tenancy with the right of survivorship (JTWROS) on out-of-state properties. In a JTWROS arrangement, property ownership automatically passes to the surviving joint owner, eliminating the need for probate. This method benefits spouses or relatives wishing to simplify property transfer upon death. However, it’s important to remember that JTWROS does not allow flexibility in asset distribution, since ownership automatically transfers to the surviving owner.

Use a Transfer on Death (TOD) Deed

A Transfer on Death (TOD) deed is another probate-avoidance tool available in some states. This type of deed allows property owners to name a beneficiary who will inherit the property upon death. The TOD deed doesn’t impact ownership during the owner’s lifetime and can be changed or revoked as desired. Upon the owner’s passing, the TOD deed transfers the property directly to the named beneficiary, bypassing probate. However, it’s crucial to check if this option is available, as not all states permit TOD deeds.

Consider Selling the Property Before Death

Sometimes, selling out-of-state property before death can eliminate the need for ancillary probate. By liquidating the asset, the estate avoids probate proceedings in that state, simplifying asset distribution for beneficiaries. While this may not be the best solution for all situations, it’s a viable option for those who want to reduce the probate burden on their loved ones. It’s worth consulting an estate planning professional to weigh the financial implications of selling versus retaining the property.

Navigating probate for out-of-state properties can be complex, especially for executors unfamiliar with ancillary probate processes. If you would like to learn more about probate, please visit our previous posts.

Reference: Nolo (June 4, 2024) “Ancillary Probate: How to Avoid Probate in Another State”

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Strategies to Resolve Disputes Between Beneficiaries

January 27, 2025

Disputes between trust beneficiaries are common, often arising from misunderstandings, perceived inequalities, or conflicting interpretations of the trust’s terms. These disputes can escalate without timely resolution, leading to costly legal battles and damaged relationships. Employing proactive strategies can help resolve disputes between beneficiaries, while safeguarding the trust’s purpose.

Common Causes of Beneficiary Disputes

Many disputes stem from beneficiaries’ lack of understanding of the trust’s terms. Complex legal language or vague provisions can lead to confusion and differing interpretations. For example, disagreements may arise over distribution schedules, asset valuations, or trustee authority.

Perceived Inequity

Beneficiaries may feel that the trust favors certain individuals, particularly if unequal distributions are involved. These perceptions can lead to resentment and claims of unfair treatment, even if the terms align with the grantor’s wishes.

Trustee Mismanagement

Trustees have a fiduciary duty to act in the best interests of the beneficiaries. However, allegations of mismanagement or conflicts of interest can trigger disputes. Common issues include failure to provide timely accountings, excessive fees, or favoritism.

External Influences

Family dynamics, personal grievances, or outside pressures can exacerbate disputes. For example, disagreements unrelated to the trust—such as unresolved sibling rivalries—may influence beneficiaries’ perceptions and behaviors.

Strategies for Resolving Beneficiary Disputes

The first step in resolving disputes is ensuring that all beneficiaries understand the trust’s provisions. Trustees or estate planning attorneys can provide detailed explanations, highlighting the grantor’s intent and addressing specific concerns. Providing beneficiaries with a clear accounting of the trust’s assets and distribution plan can also alleviate misunderstandings.

Facilitate Open Communication

Encouraging open and respectful dialogue among beneficiaries can prevent conflicts from escalating. Regular meetings or discussions, mediated if necessary, allow beneficiaries to voice their concerns and reach a consensus. A neutral party, such as a mediator or financial advisor, can help facilitate these conversations and maintain focus on the trust’s purpose.

Consider Mediation

Mediation offers a cost-effective and non-adversarial alternative to litigation. A professional mediator works with beneficiaries and trustees to identify the root causes of disputes and negotiate mutually agreeable solutions. This approach preserves relationships, while addressing concerns about the trust’s administration.

Appoint a Neutral Trustee

If disputes involve allegations of trustee bias or mismanagement, appointing a neutral third-party trustee can restore confidence in the trust’s administration. Professional fiduciaries or corporate trustees bring objectivity and expertise, reducing the potential for future conflicts.

Utilize No-Contest Clauses

Grantors can include no-contest clauses in the trust to discourage frivolous disputes. These clauses state that beneficiaries who challenge the trust’s terms risk forfeiting their inheritance. While not enforceable in all jurisdictions, no-contest clauses can deter unnecessary litigation and encourage beneficiaries to seek resolution through other means.

Seek Legal Counsel

In cases where disputes cannot be resolved informally, consulting an estate planning attorney is essential. Attorneys can provide guidance on trust interpretation, compliance with fiduciary duties, and options for resolving conflicts. In some instances, formal legal action may be necessary to protect the trust’s assets or enforce its terms.

Preventing Future Disputes

Preventing disputes begins with proactive estate planning. Clear and specific trust provisions, regular updates and open communication with potential beneficiaries can reduce misunderstandings. Working with an experienced estate planning attorney ensures that the trust reflects the grantor’s intentions, while addressing potential areas of conflict.

Building a Path to Resolution

While trust disputes can be emotionally and financially draining, constructive conflict resolution strategies help protect the grantor’s legacy and maintain family harmony. Trustees and beneficiaries can navigate disputes effectively and uphold the trust’s purpose by fostering transparency, open communication and professional guidance. If you would like to learn more about beneficiaries and trusts, please visit our previous posts.

Reference: The Washington Post (Nov. 16, 2024) “Asking Eric: Siblings disagree over inheritance split”

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Locating Missing Assets is Essential in Probate

January 22, 2025

When an individual passes away, their assets must be inventoried to settle the estate. However, it is common for executors or estate administrators to encounter missing or undisclosed assets. These can range from forgotten bank accounts to overlooked investments or real estate holdings. Locating missing assets is essential to fulfilling the deceased’s wishes and ensuring a smooth probate process.

Why Assets Go Missing

Missing assets often result from a lack of organization or documentation during the deceased’s lifetime. Individuals may have sometimes failed to update their records after acquiring new assets. Others may have intentionally kept certain holdings private or hidden. Digital assets, such as cryptocurrency or online accounts, can be easily overlooked if no record exists.

Missing assets can also stem from outdated beneficiary designations, closed accounts, or property acquired under different names. Executors must remain diligent and methodical to uncover these resources.

Steps to Locate Missing Assets

1. Review Personal Records

Begin by thoroughly reviewing the deceased’s documents. Tax returns, bank statements and insurance policies often reveal the existence of accounts or properties that require further investigation. Look for recurring payments, dividends, or interest income, which may point to assets, such as investments or savings accounts.

Correspondence, such as emails, letters, or physical mail, can also provide valuable clues. Notices from financial institutions, property tax bills, or statements from investment firms may lead you to assets that were not initially disclosed.

2. Search Public Records

Public records are an invaluable resource for identifying real estate and other registered property. County or municipal offices often maintain records of deeds, mortgages and tax assessments. Searching these databases can uncover properties owned by the deceased that were not listed in their estate documents.

Unclaimed property databases can also be used to search for forgotten bank accounts, stocks, or uncashed checks. Many states maintain searchable online registries for unclaimed funds, often accessible for free.

3. Investigate Digital Footprints

With the rise of online banking, digital assets can easily go unnoticed. Review the deceased’s computer, phone and email accounts for clues about digital wallets, cryptocurrency, or online investment platforms. Social media accounts and cloud storage services may also contain records of valuable digital assets.

Be sure to look for password managers or written login credentials, as these can grant access to encrypted accounts. Consulting with a tech-savvy professional or cybersecurity expert may help if access to these accounts is challenging.

4. Communicate with Financial Institutions

Contact banks, credit unions and investment firms where the deceased held accounts. Provide proof of your role as executor or administrator, such as letters testamentary, to gain access to account information. Financial institutions can often provide a complete list of accounts associated with the deceased, including dormant or inactive ones.

5. Consult Known Associates

Speak with family members, friends and professional advisors who were close to the deceased. Attorneys, accountants, or financial planners may have insight into undisclosed assets or ongoing financial obligations. Heirs and beneficiaries may also have knowledge of items or accounts the deceased valued but did not document.

Challenges in Recovering Missing Assets

Locating missing assets can be time-consuming, especially when dealing with complex estates. Some assets may be tied up in legal disputes or require additional documentation to confirm ownership. Executors must stay organized and persistent, keeping detailed records of their efforts.

In cases where assets are hidden intentionally or unintentionally, hiring a forensic accountant or private investigator may be necessary to uncover the full scope of the estate.

Legal Obligations of Executors

As the estate administrator, you have a fiduciary duty to locate and safeguard all assets belonging to the estate. Failure to do so can result in legal liabilities, disputes among beneficiaries, or delays in the probate process. A comprehensive search not only protects you legally but also ensures that the estate is settled equitably and transparently.

Avoiding Missing Assets in the Future

Encourage loved ones to maintain organized financial records and update their estate plans regularly. Comprehensive documentation of assets, passwords and account details can prevent future confusion and reduce the burden on executors. Estate planning attorneys often provide tools, such as asset inventories, to help individuals track their holdings effectively.

Bringing Closure to the Estate

Locating missing assets is more than an essential financial task in probate—it’s a way to honor the deceased’s legacy and fulfill their final wishes. By remaining diligent and methodical, you can ensure that all property is accounted for and distributed fairly among beneficiaries. If you would like to learn more about probate and estate administration, please visit our previous posts.

Reference: The Wall Street Journal (June 29, 2024) “Grief, Then Paperwork: The Messy, Thankless Job of an Estate Executor”

A Trust Only Works if it is Properly Funded

January 9, 2025

A revocable trust is a powerful estate planning tool that helps individuals manage their assets during their lifetime and distribute them efficiently after their death. However, a trust only works if it is properly funded. The American College of Trust and Estate Counsel explains that many individuals make the mistake of setting up a trust but fail to transfer assets into it. This leaves their estates vulnerable to probate, taxes and disputes. To fully benefit from your trust, you must ensure that it is appropriately funded with all intended assets.

What It Mean to Fund a Trust

Funding a trust involves transferring ownership of assets from your name into the trust’s name. This step gives the trust legal control over the assets, allowing them to be managed and distributed according to the terms of the trust. Without this transfer, your assets may remain subject to probate, and your trust could become an ineffective document.

Key asset types that can and should be transferred into a trust include:

Real estate properties
Bank and investment accounts
Tangible personal property, such as valuable jewelry, artwork, or collectibles
Business interests and intellectual property
Life insurance policies (with the trust named as the beneficiary)

By funding your trust, you ensure that these assets are managed seamlessly during your lifetime and distributed efficiently upon your death.

Why Trust Funding is Essential

Failing to fund a trust undermines its primary purpose. If assets remain outside of the trust, they may become subject to probate—the often lengthy and costly legal process of settling an estate. This can delay the distribution of assets to your heirs and increase the likelihood of disputes among family members.

A funded trust also provides benefits that unfunded trusts cannot, including:

Privacy: Unlike wills, which become public records through probate, trusts keep the details of your estate private.
Control: Funding the trust ensures assets are distributed according to your wishes without interference from courts or state laws.
Continuity: In the event of incapacity, the trust enables a successor trustee to manage your assets without court intervention.

How to Fund a Trust

Properly funding a trust requires transferring ownership of assets into the trust and ensuring that documentation is updated to reflect the change. Each asset type requires specific steps:

Real Estate

To transfer real estate, you must execute a deed transferring ownership to the trust. This often involves recording the new deed with the local land records office. Consult an estate lawyer to ensure that the transfer complies with state laws and doesn’t inadvertently trigger taxes or other issues.

Bank and Investment Accounts

Banks and financial institutions typically require documentation to retitle accounts in the name of the trust. This might involve filling out specific forms or providing a copy of the trust agreement. Failing to update account ownership could result in these assets being excluded from the trust’s control.

Tangible Personal Property

A written assignment can transfer tangible personal property to the trust, such as art, heirlooms and jewelry. The assignment lists the items being transferred and formally declares their inclusion in the trust.

Life Insurance and Retirement Accounts

While retirement accounts, like IRAs and 401(k)s, are not typically retitled to a trust for tax reasons, you can name the trust as a beneficiary. For life insurance policies, updating the beneficiary designation to the trust ensures that proceeds are directed according to the trust’s terms.

Business Interests

If you own a business, transferring shares or interests into the trust allows the trustee to manage them as needed. This requires amending operating agreements, stock certificates, or partnership documents to reflect the transfer.

Common Pitfalls to Avoid

Even with good intentions, individuals often make mistakes when funding their trusts. Common errors include:

Leaving assets out of the trust: Forgetting to transfer all intended assets undermines the trust’s effectiveness.
Failing to update beneficiary designations: Beneficiary forms conflicting with trust terms can create legal disputes.
Not reviewing the trust regularly: As assets change over time, it’s essential to revisit and update the trust to include new acquisitions.

An estate lawyer can guide you through the process and help ensure that all assets are correctly transferred and documented. Remember, a trust only works if it is properly funded. It is a living document that requires ongoing attention. Regularly reviewing and updating the trust ensures it remains aligned with your goals and includes all current assets. Properly funding your trust provides security for your loved ones, avoids unnecessary legal complications and ensures that your legacy is preserved. If you would like to learn more about funding a trust, please visit our previous posts.

References: American College of Trust and Estate Counsel (ACTEC) (Aug. 31, 2023) “Funding Your Revocable Trust and Other Critical Steps” and American College of Trust and Estate Counsel (ACTEC) (Sep 21, 2023) “Tangible Personal Property in Estate Planning”

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