This is the first of two articles on reviewing a trust. In this one I address whether a Palo Alto family with a living trust should have the creator of the trust do the review, or find a different attorney to take a fresh look.
Q: We live in Palo Alto, California and in the 90s our family chose a Burlingame estate planning attorney to establish a living trust. Now we are trying to verify if the attorney who drew it up really is trustworthy and experienced with living trusts. We need a trust review. Specifically:
- Is it better to go to the same attorney for this "check up" or someone new?
- Since we are asking for a trust review, would the fees be much lower than if we were starting from scratch?
A: You were smart to use an estate planning attorney instead of using off-the-shelf forms or packages from a self-service legal website. You are smart to check and update your living trust, too. Circumstances can change alot in a short time. In fact, it is a good idea to do a trust review and update your trust every three to five years.
Vetting estate planning attorneys using Avvo
I am glad to hear that you are vetting estate planning attorneys before hiring anyone. One way to check out a lawyer is to look on Avvo. Search for "estate planning" in the Palo Alto area and see which lawyers' names appear with high Avvo ratings. See if they've answered questions and read the answers to see what you think of their approach.
Checking out attorneys using the State Bar website
Also check out the State Bar website. Use the "Advanced Search" feature and the "Additional Search Criteria" to find a specialist in Estate Planning law. Less than 1% of all California lawyers are certified as specialists in Estate Planning. In order to be certified, a lawyer has to pass a specialized bar exam and meet rigorous experience requirements.
Also, check out these individuals' websites to see what their approach is to estate planning to see if you think the "chemistry" will be right.
What you can expect to pay
You get what you pay for! If price is your most important criterion, then skip all of the above and just phone lawyers until you find the one with the lowest price. Just remember, if they don't do it right, it cannot be corrected after you die or become incompetent.
Depending on the complexities of your situation (and whether you're married or single, have children who need to be protected, etc.), an experienced attorney's fees will be anywhere from $2,000 to $10,000. As a very rough rule of thumb, figure out your net worth and multiply by 0.10% to 0.25%. That usually approximates the complexity of your estate and the cost of planning for it properly.
For example, if you have an estate worth $3 million dollars, you should expect to pay between $3,000 and $7,500... a little less if your situation is really "plain vanilla"; a little more if it's complex.
Look for the next article on trust reviews
In the next article on trust reviews, tentatively titled "How is Review of a Living Trust Different from Estate Planning?" I'll show an example of what we examine when we do a trust review, and how a trust review differs from creating an estate plan.
Getting legal help
If you are currently working with a highly qualified estate planning attorney that you are comfortable with, it is probably best to continue working with him or her. On the other hand, if you have doubts about the advice you are getting or the experience you have working with the person, it's time to look elsewhere.
All the best,
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Peaceful moments with a child, grandchild, or other family member may be the very best thing about taking vacation. Before you head out of town, tick off essential estate planning steps like updating your beneficiaries. Knowing you've planned for everything you own and everyone you love might make the time together even more fulfilling. Learn more »
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Taking a break this summer?
It may seem like a drag to discuss estate planning in these warm summer months, but see if you can fit in some essential steps. Among other benefits, you may feel a deeper sense of well being during family visits and vacations, if you know you have planned for everyone you love and everything you own.
My mental tick list
Here are the things I mentally tick through before any big out of town trips:
- Have I chosen a reliable trustee or executor?
- Does my trustee/executor have access to my key documents? (If they are in a safety deposit box or safe, for example, do they have a key or combination handy, just in case?)
- Do I have enough insurance coverage?
- Are the beneficiary designations on my life insurance, retirement plans and annuities, in synch with my estate plan? (For most people, they are not.)
- Is my living will and healthcare power of attorney up-to-date with the HIPAA Act?
- Has anything changed that my advisors need to know about before I go?
- Are there are provisions in our estate plan for care of our family pets, should anything happen to me?
Getting essentials squared away before you leave town
Have I convinced you to at least check into these things before you leave town? If so, we are here to help. And unless you're leaving town tomorrow, we can probably get essential work done before you go -- freeing you to take a restful, guilt free holiday. Get started using a convenient form here at our website »
Checklists and guides that may help you
Here are guides I've published that might help you:
All the best,
My friends and clients know that I bring my dog, Chelsea, to work with me almost every day.
Making provisions for pets' care
If you, too, love your pets, your estate plan must include provisions for their care if you become incapacitated and after your death. If you do not adequately provide for your pets’ care, chances are they will be dumped at the local pound.
Over the years, we have heard of numerous high profile people, such as Leona Helmsley, who have established multi-million dollar trusts for their pets’ care. Although this is probably overkill for most of us, California, along with 38 other states, has enacted legislation which recognizes pet trusts. The California law allows courts to liberally construe pet trusts with the goal of carrying out the settlor’s intent – that is, the law requires the courts to do its best to figure out the intentions of the person who set up the trust and give them the benefit of the doubt if it’s not clear what the person intended. Moreover, courts are authorized to consider all relevant evidence of the settlor’s intent.
How a pet trust works
Pet trusts are really not much different than a trust established for a minor child. A pet trust should name a guardian to care for the pet and should name a trustee who will be responsible for managing the funds in the trust and distributing those funds for the care and maintenance of your pet.
Specifying expenditures helps
The trust should clearly set forth how the funds should be spent, including:
- Types of food
- Grooming
- Walks and playtime
- Boarding when the guardian goes on vacation
- Routine medical care
- Allergies
- The extent to which medical care should be given in the event of a serious injury or illness
- Whether you want your pet to be euthanized in the event of terminal illness or critical injury, and
- Whether you want your pet cremated or buried upon its death.
Incentives for taking good care of your pet
You should also consider providing an annual stipend to the caregiver for as long as your pet lives. This is an added incentive for the guardian to take good care of your pet and ensure that it remains healthy.
It’s also important to include a provision for how the funds remaining in the trust should be distributed after your pet dies. Because of the possibility of a conflict of interest, it’s usually best to leave the remainder of the funds in the trust to a family member or a charity rather than to the pet’s guardian.
What if I don’t have a someone who is willing to act as guardian of my pet?
Before appointing a guardian for your pet, it’s best to talk to each of the prospects. If no one will agree to act as the guardian, you should consider contacting a pet rescue organization that has a “no kill” policy and which is committed to finding good homes for pets. Your estate plan can direct the trustee or executor to deliver your pet to this organization if you become permanently incapacitated or after you die.
What if the money runs out before my pet dies?
The pet trust should include a provision addressing what should be done if your pet lives so long that the funds in the trust run out. It’s hard to believe that the guardian might not have bonded with your pet and be willing to continue caring for it long after the trust funds run out. But if that’s the case, the trust should direct the guardian to deliver your pet to a “no kill” animal rescue.
Getting legal help
Not all states recognize pet trusts; therefore, you should speak with an estate planning attorney in your state to find out whether they are permitted in your state. Additionally, a qualified estate planning attorney can explain the tax implications of a pet trust and assist you in setting up a trust that will ensure that your pet is cared for according to your wishes.
Get started >>
Learn more
Request your copy of Picking Your Trustee in California. In this free guide you'll find advice on how to choose a trustee and how to put your values at the center of your estate-planning process.
All the best,