Episode Transcript
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Speaker 1 (00:00):
Are you prepared?
Speaker 2 (00:00):
This is our weekly radio program for individuals and their
families where we address the challenges we all.
Speaker 1 (00:05):
Face as we age.
Speaker 2 (00:06):
We talk about aging as a lifestyle, the issues that
must be confronted, and the careful planning that's required to
avoid crises in the future. Life Happens will provide you
with tools to educate and prepare yourself for events like retirement,
protecting your income and assets, planning to pay for nursing,
home and home care, special needs, willson trusts, planning for
an untimely death, and resolving disputes in and out of court.
(00:28):
I'm Aaron Connor from Pure o' connor and Strauss, joined
this week by Brent Stack. Good morning, Brent, Good morning, Aaron.
If you don't know, Brent's been with us almost a year.
Speaker 3 (00:39):
Now, right since July of twenty four.
Speaker 2 (00:42):
Yeah, so we're getting there. Brent does the litigation with me.
He probably more specializes in guardianships than trust litigation at
this point, but he's learning, learning.
Speaker 1 (00:58):
As we go.
Speaker 3 (00:59):
We do the messy stuff.
Speaker 2 (01:00):
That's right, you know, if you and your sister or
you and your brother don't like each other. Now while
mom and dad are alive, it doesn't usually get better.
Mom and dad are usually kind of the referee in
that situation or like an anchor in it. Like I
(01:22):
don't mean that in a bad way, dragging you down.
I mean that like it's a kind of like the
sun with you know, pulling you in right.
Speaker 3 (01:29):
Yeah, the shatters that we've seen in families when mom
and dad go right.
Speaker 2 (01:34):
Because people don't necessarily have to behave anymore right like
people should behave. And sometimes it's justified, and sometimes it's
you've got a tricycle when you were three and I
did not, and it just never gets better. It honestly
is amazing to me how many people like actively keep
score over their lifetime.
Speaker 3 (01:55):
Yeah, I agree, and I think a lot of these
people don't see it coming right, and it makes me,
you know, it's sad. I want to go home and
hug my sisters.
Speaker 1 (02:07):
Well.
Speaker 2 (02:07):
Obviously, having a good family dynamic is much better, right.
And one of the issues is the more people you have,
the harder it is to get along, just because there's
that many more personalities. You know, there may be five
of you, and four of you get along great, but
then there's one person or.
Speaker 1 (02:26):
I mean.
Speaker 2 (02:28):
A lot of times there's a component of mental illness
to someone, right, Yeah, sure, And in the older generation
a lot of undiagnosed mental illness, untreated medicated if that's
the appropriate course, but even lack of any kind of
therapeutic and just acknowledgment. And what I've seen is when
(02:51):
people age, it doesn't get better, it gets worse. Sure,
So if that's out there, you know, some things are
on ofa We try to put a plan in place
that avoids every kind of strife possible.
Speaker 3 (03:04):
I think you're right, planning, planning, planning.
Speaker 2 (03:06):
And but ultimately I used to work for a guy
who would say you could sue the pope for adultery. Right,
you don't really have to have like a claim that
needs to make a lot of sense to make people's
lives difficult. Now, hopefully there's no lawyer is going to
take a case that doesn't really have any merit, But
that doesn't stop people from acting what we say is
(03:27):
pro se, meaning without a lawyer, which is kind of
the ultimate nightmare in a courtroom. We have at least
one large case with a pro se litigant, and that
has already gone on I think since twenty eighteen. I
can't say, for sure, but it makes it more difficult,
(03:50):
certainly makes it almost impossible to settle anything, absolutely, because
you can make a very good offer and there's nobody
to really guide that person to say what will happen
when you don't.
Speaker 3 (04:03):
Yeah, I think the pro say litigant is extraordinarily skeptical
and they don't know what they don't know about procedure.
Speaker 1 (04:15):
Right. Procedure is very important.
Speaker 2 (04:17):
In a court, and that means how you initiated a
case in a lot of ways. Right, so whether it's
a complaint or a petition, and serving people, serving the
right people, serving them timely, having the contents of a
petition or a complaint that actually have to.
Speaker 1 (04:37):
Be there, which in a lot of ways is.
Speaker 2 (04:41):
Not terribly difficult in the Internet era, but sometimes like
fraud for instance, has a higher pleading requirement, certain things
like that, but service is usually a big trip up
for even serving the right people.
Speaker 3 (04:57):
Yeah, it is specialized. I mean we did learn some
thing in law school, correct. I mean there's a reason
that we that we exist in this field. There's a
reason that the courts, you know, appreciate our skill set,
our specialty.
Speaker 2 (05:15):
I mean we're not even talking about like substantive stuff
right exactly, you actually have a case, can you get
into the court right and before.
Speaker 3 (05:23):
A judge exactly, Because we're not talking merits here, we're talking.
Speaker 2 (05:27):
Right basics, right, because I've seen lots of these just
get rejected out right because they don't meet the filing requirements.
Filing fee doesn't get paid, people don't get served, and
you only get so many cracks at this exactly.
Speaker 1 (05:42):
Sometimes you only get one crack.
Speaker 2 (05:44):
So it's important to have some some guidance and some
knowledge and to have a case ultimately right.
Speaker 1 (05:53):
But if you do end up in.
Speaker 2 (05:58):
A situation where it's sibling versus sibling, I I hope
for your sake that everybody has their own counsel, because
it just makes things extraordinarily difficult.
Speaker 3 (06:06):
Yeah, there's a lot of pitfalls before you can get
to merits. I think. I think that's the point that
we're trying to make here.
Speaker 2 (06:11):
And people tend to dismiss the counselor part of being
a lawyer. A lot of what we are doing is
really counseling people on what the best course of action is,
and they're free not to take our advice. I'm often
surprised how many people pay me and then don't do
what I tell them to do.
Speaker 1 (06:30):
Right, you're paying for my advice, and you know you're
you have agency, You're free to do what you want
to do.
Speaker 3 (06:38):
But I think you're you're exactly right. I mean, I've
found myself a lot in the last few weeks just
those making those difficult phone calls, just saying hey, this
is this is where we might get to, but this
is where we should go.
Speaker 2 (06:53):
And well, winning a court case is not necessarily the
end of anything, right, absolutely, because people have the right
to appeal, and appeals can go on not forever, but
basically forever, and it's not good for anyone. I spend
a lot of my time talking clients about the emotional
(07:15):
damage or cost of continuing. And if this is a
case where someone has died, you're likely not even grieving
that because you are continuing to plow through this. And
sometimes that may be necessary. But when we can get
to a point where it's just about as good as
it's going to get, we have to be realistic. And
(07:37):
I'm sure everyone listening understands this, but Brett and I
do not work for free, and the longer that we work,
the less you are recovering, generally speaking, from the same
pool of money.
Speaker 3 (07:49):
That's absolutely the case. Yes, some you know, some of
our unfortunate clients have jumped immediately into litigation following the
death of a loved one, and I can guarantee that
they have not grieved because they've been in the fight
since since that day. Yes, And you know, I think
(08:10):
it's just the further it drags out. I think the
larger the emotional toll it plays on the entire family.
And you know, I think our clients say a lot
of times, you know, I can't wait to take so
and so to court. But that's that's really not what
you want.
Speaker 2 (08:29):
It is really and we say it all the time.
The only people who went in court are the lawyers, right,
And we do get good results for our clients. We
do time, we do, but sometimes it's better to negotiate
that ahead of time.
Speaker 3 (08:44):
Sometimes you get that person in the you know, sometimes
you do get that person to court and the judge
will say, go out in the hallway and figure this out.
And that's not what people want to hear. They think
that court is where, you know, they can strike someone
down with a lightning bolt, and.
Speaker 2 (08:58):
They think it's going to be like a law order episode, right,
and in reverse, we're going to court first and they'll
go to jails.
Speaker 3 (09:05):
Right exactly. So it's we're here to help you resolve
your own disputes, but ultimately you're gonna need to participate
in resolving your own disputes with your with your loved
ones and with others.
Speaker 2 (09:20):
And I will say this, there are people who sometimes
contact us and they say, can you write my sister
a letter? We absolutely will not do it. Okay, that
is fruitless, nasty. G No, don't do it. Not interested,
gets no results. Just so, we usually do want to
be in a court context sooner rather than later, because
nothing gets resolved outside of that. But how we get there,
(09:44):
and kind of the tenor of how we get there
is important as well.
Speaker 3 (09:49):
It is helpful when you when you get that man
or woman in a robe in a room, absolutely because
everyone kind of they'll.
Speaker 2 (09:56):
Say, this is your problem, and this is your problem,
and I'm not making a decision, but you you both
have problems.
Speaker 3 (10:04):
It's helpful for you and I to get a judge involved.
Speaker 2 (10:08):
It's very rare that they say you are great and
you are terrible.
Speaker 3 (10:12):
That very rarely happens exactly. We stay in the gray
an awful lot.
Speaker 2 (10:20):
But so if you're looking for complete vindication, the courtroom
is generally not right.
Speaker 3 (10:25):
Yeah, yeah, right, yeah exactly. I think you're right. No
one's going to get one hundred percent win. We see
that very rarely. I mean it's not it would take years.
It would take years.
Speaker 1 (10:35):
And thousands upon thousands of dollars to do that.
Speaker 2 (10:39):
And it's really the judge is not interested in that either.
The judge is interested in solving the problem in a
fairly reasonable and quick way.
Speaker 1 (10:50):
So we're coming up on our first break.
Speaker 2 (10:52):
When we come back, we're going to continue and talk
about state litigation and trust litigation.
Speaker 1 (10:57):
This is Life Happens Radio, and we'll be back after this.
Speaker 3 (11:04):
One.
Speaker 1 (11:06):
You look welcome back to life. I am Aeric Connor
from Femal count Instruments. We are in the state planning
law firm.
Speaker 2 (11:14):
We do also do medicaid work, in guardianship work, and
a state and trust litigation.
Speaker 1 (11:19):
I'm joined by Brent Stack.
Speaker 2 (11:20):
He is also a litigator by trade. So we are
talking about litigation shocking. We were talking about some of
the problems that can't be solved by litigation in the
first segment. There are problems that can be solved by
litigation too.
Speaker 3 (11:37):
Yes, sometimes it is necessary.
Speaker 2 (11:38):
Unfortunately it's unpleasant and stressful, but there's sometimes that it's
just not going to get done otherwise. And these can
be in estates, they can be in trusts, they can
be in a guardianship. So a lot of times this
happens when mom or dad is alive, right, Usually not
(12:01):
both right. I have had a rare occasion where we
have alleged that both mom and dad are incapacitated, But
that's unusual. Usually it's the survivor, and it may be
that they're not taking care of themselves. This could be,
you know, house could be in disrepair. We've seen all
sorts of garbage and animals and infestation.
Speaker 3 (12:23):
And a lot of financial abuse. Also, we see a
lot of financial abuse where.
Speaker 1 (12:28):
That's the more common.
Speaker 3 (12:29):
You know, these these scams will it whether it be
online scams or phone scams. We've seen a lot of
of our alleged incapacitated people being taken financially being taken
advantage of financially, right.
Speaker 2 (12:48):
And most of these cases are not clearly incapacitated person, right,
I mean.
Speaker 3 (12:55):
Good days, good days and bad days.
Speaker 2 (12:57):
Right, when it's clear that someone is incapacitated, it's a
very easy is not the right word, but it's not
as difficult as it is when we have waning capacity, correct, Right,
because having been a court evaluator, right, and the person
that is a court evaluator, their role in a guardianship
(13:18):
is to interview people and review documents and see what
the facts are and see what capacity is like, and
to come to a set of recommendations. That is someone
appointed by the court who is a neutral and Brent,
you've been in that role.
Speaker 3 (13:34):
Yeah, kind of the eyes in the ears of the court, right,
take all take the entire story and present it to
the court with a set of recommendations.
Speaker 1 (13:43):
Because the truth is usually somewhere in between.
Speaker 2 (13:45):
Absolutely, you get a petition that says X, Y, and z,
you're going to get an answer that says, probably that
none of that is true other than the person's name
and birth date, right, and maybe the kids are right.
Speaker 1 (13:57):
So, but and then it.
Speaker 2 (14:01):
Usually when you get a good court evaluator, they see
this person more than one time.
Speaker 1 (14:05):
Yes, because I've seen it many times.
Speaker 2 (14:09):
Someone with waning capacity can turn it on for a
short period of time.
Speaker 3 (14:14):
Yeah, capacity is a tough issue. You want to have
a conversation that lasts more than ten minutes because you
can you can see some of these people oriented to
time place who the president is right, But then all
of a sudden, you know, things start to slip, and
(14:37):
I think that's tough for family members. They don't they
don't see that. I think, like you said, with waning capacity,
it's it's almost like when you you're driving your car
in your own breaks start to go. You know, you
just press a little bit harder on the pedal each time,
and you don't really comprehend that things have gotten out
of control.
Speaker 2 (14:59):
Right the time you're Fred Flinstone stopping the cars with
your feet. We've got a real problem.
Speaker 3 (15:04):
Exactly, right exactly, And unfortunately that's that's where we come in.
But you know, we can come in then and help
you sort through your your incapacity issues in terms of
getting a guardian appointed for your loved one. And there
are a lot of things that a guardian can do
(15:24):
to kind of right these wrongs. You take over financial control,
you can stop that financial abuse. You can get more
of protection against whoever the financial abuser is. We can
help with nursing home placement. The guardian can can do
nursing home placement, I think the only thing that And
it's important to note there are limitations on guardianship. You
(15:45):
can't place your loved one in a mental institution or
a drug and alcohol facility, and you can't you can't
write a new will.
Speaker 1 (15:54):
Yeah.
Speaker 2 (15:54):
I mean a lot of times people come to us
and they are trying to get guardianship over a relative,
usually who has mental illness, and it is very difficult
unless that person is willing to give you guardianship. The
problem with even with that, though, is if they change
their mind, it can be a big problem. A little
(16:16):
known kind of provision of the guardianship world is that
if you want to terminate a guardianship, the burden is
on the person who wants to keep the guardianship, not
the person who's under a guardianship right, And in my opinion,
that's probably the pendulum swinging too much, too far to
the rights of the incapacitated person, because we're talking about
(16:40):
a person at that point who's already been determined in capacity.
There's no allegation they've gone through a factual hearing or
they've agreed which is a little bit different than they're
technically a person.
Speaker 1 (16:51):
In need of a guardian.
Speaker 2 (16:54):
But so maybe under those circumstances it makes a little
more sense. But predominantly we don't agree to a person in
need of guardian. We're agreeing to you know, a lot
of the contest is over who the guardian.
Speaker 3 (17:08):
Is a lot most of the time.
Speaker 2 (17:11):
There's occasional cases where capacity is an issue and the
person alleged to be incapacitated is fighting, but usually that
doesn't win.
Speaker 3 (17:24):
Out right, and it's it's a tough it's a tough
hearing when you know, when you're alleging that your loved
one is a person in need of a guardian, you
have to put on proof in front of them, correct,
you know they're at the hearing, you're alleging all of
their functional limitations, and it's very uncomfortable. So oftentimes we
(17:49):
find that, you know, a more favorable outcome is someone
agreeing to being a person needing a guardian, not an
capacitated person.
Speaker 2 (18:01):
And they tend to like that better as well, because
they're not deemed incapacity.
Speaker 3 (18:05):
Absolutely, and and I do think you know when you
are determined to be an incapacitated person. I think that
the court has as some reporting requirements. I think that
you kind of you might be flagged as a person
who's incapacitated rather than a person who's consented to having
a guardian, right, and so there are there are future consequences.
(18:29):
And also, yes, these these proceedings are uncomfortable for families.
It's not a situation you want to have yourself involved in.
So that's why we often recommend that you get yourself
lined up with a health care proxy and a power
of attorney. The court at a bare minimum, the courts
(18:52):
will not appoint a guardian for you if you have
those things in place. So I think gets recommended that
all families, as people age, you do your planning, you
get your health care proxy, you get your power attorney,
you set up your trusts, you get your wills in order,
(19:12):
and then you can avoid avoid coming into court under
these unfortunate circumstances.
Speaker 2 (19:17):
Right. The best guardianships, if you will are Mom or
Dad agrees to who the guardian should be, and it
really can be like a.
Speaker 1 (19:29):
Ten or fifteen minute hearing. Absolutely, yeah, that's the best
it gets. And those happen.
Speaker 2 (19:37):
But to be fair, We've probably spent it close to
ten thousand dollars to get to that point. So you know,
I'm not going to say what a power of attorney
and health care proxy costs, but as well less than
ten thousand, absolutely right, So you don't want to be
there if you don't have to, It's better to pick
(20:00):
who you want to be in charge. That's the other
thing that maybe people don't consider is that in a guardianship,
the person in charge isn't necessarily the person you would
have been appointed, right, right, Maybe the person with a
better lawyer.
Speaker 1 (20:14):
Right.
Speaker 2 (20:15):
It may be that the person you would have appointed
has some issue right that you could have appointed.
Speaker 1 (20:25):
So I don't know.
Speaker 2 (20:27):
Let's say five years ago, it was a complete bar
if a person had a felony to be in a
guardian correct, right, and I.
Speaker 1 (20:35):
Certainly understand the thinking.
Speaker 2 (20:37):
But relatively recently in the legal world that was changed
to it's a factor, but it's not a complete bar.
And it may be some kind of felony that's I
don't know, not related to the types of things that would.
Speaker 3 (20:54):
Matter, right. I think it's yeah, I think you've you've
got Department of Social Services is your guardian of last resort.
They're overwhelmed. You don't with that with guardianships, they're short
on staff. It's not it's not ideal for your loved
(21:15):
one to have the commissioner of Social Services become their guardian.
Speaker 2 (21:19):
Right, which really means that an attorney in that department
is probably.
Speaker 3 (21:24):
There, right, and a social worker ye, and you're gonna
your minimum visits per year, et cetera.
Speaker 1 (21:31):
There's just four right, which isn't a lot.
Speaker 3 (21:34):
It's it's not a lot. You've got your there's a
it's it's called the Part thirty six list, which is.
Speaker 2 (21:41):
It's the choice, it's the thirty sixth choice that you
would actually want to be your guardian.
Speaker 3 (21:47):
It's called that, and that's not a great result. So
the courts have loosened the the prohibition on felon's sometimes
your family. Sometimes your family felon is uh is a
better guardian than social services or a Part thirty six lists.
Speaker 2 (22:08):
So I mean, if the felony is embezzlement and mom
or dad has some money, they're not going to get
to move typically yet without about typically financial any any
sort of that, fraud or physical abuse, that would probably
be the bar. As elder abuse, the elder abuse certainly
(22:29):
certainly would be as seen as a problem. But yes,
you you know, something like arson, if it's okay, all
right with that?
Speaker 3 (22:37):
Yes, okay, Now that one.
Speaker 1 (22:40):
Directly we try to do.
Speaker 2 (22:42):
We ultimately are trying to put a plan in place
to make sure you're covered, to make sure your loved
ones get or your beneficiaries get what they're supposed to get,
and the people who you do not want to get
things do not. And that may be removing you may
be removing a beneficiary, or you may be making sure
that a let's say, a child's spouse doesn't end up
(23:06):
with all the money or some other predator. As we say,
that's important to our clients quote unquote bloodlining the money right,
And in most situations a trust can continue on for
a very long period of time. Now New York has something,
at least for now called the Rule against perpetuities, right,
(23:29):
which is a question on the bar exam that ninety
percent of the attorneys never comes up right, But in
real practice it doesn't right. I mean, the thing is
so essentially the rule of perpetuities time is about one
hundred and twenty years because.
Speaker 3 (23:48):
Lives and being plus twenty one.
Speaker 2 (23:50):
That's right, right, So, I mean the longest anyone's ever
lived is about one hundred and fifteen years exactly. So
if you roll the dice and you got that person, great, right,
but unlikely. So let's just say you had somebody live
into their nineties, you get twenty one years. You got
about you know, rough math, lawyer math, one hundred and
(24:10):
twenty years best case scenario in New York. In the
state like Delaware, you can have what's called the dynasty
trust that can essentially go on forever if you have
enough money, right, and you know, let's be honest, very
few people have enough money to create like a long
lasting dynasty trust like DuPont. Like the DuPont family, it
(24:32):
was very involved in Delaware. They owned a lot of
property in Delaware, and they had a lot to do
with how the laws were drafted in this favorable way,
and the DuPont family would be a family that still
have generational wealth well downstream yep.
Speaker 1 (24:51):
But you can still create.
Speaker 2 (24:53):
Kind of your own I don't know many dynasty trust
If you want what we try to make sure that
money goes to your kids, not their spouse. And then
if something happens to your child. That goes to your
grandchildren again, not to the spouse. Right, if you wanted
to go to the spouse, hey, great, we can make
that work too. But that's that's like two percent of people.
Speaker 3 (25:15):
Yeah, I think you're right. I didn't do Uh, I
didn't do a lot of trust litigation before I came
to the firm, right, And I've been learning a lot
about trust since I've been at the firm, and I
think what a lot of people don't know. I think
you're right. Some people are afraid of irrevocable trust or
trust in general. But I think you're right. I mean,
(25:36):
it's not just for the rich, it's not just for
the DuPonts. It's for everybody. It's it's by far the
best way to protect your assets and your wealth and
to pass it on, like you said, to who you
want to receive it, and to protect it from who
you don't want to receive it, including the government if
we're la you know, absolutely, I think that's uh, it's
(25:59):
really important. You know. I've been telling my family members
since I've started working here. You need to get in.
You need to do this right. You don't have to
have a million dollars, right, you know, any amount of
wealth and you don't. It's not just money, it's not
just cash. Well, it's your home.
Speaker 1 (26:16):
It's the easiest thing to put in the trust.
Speaker 3 (26:17):
Is property, exactly right.
Speaker 1 (26:19):
And if you own.
Speaker 2 (26:20):
Property in two states, you really want to trust because
you don't want your family probating in.
Speaker 1 (26:24):
Two places exactly absolute disaster.
Speaker 3 (26:26):
Yeah. Money wise, yeah, I mean too. I think we've
said it before on the show, but the best gift
that you can give your family when you pass is
the ability to avoid probate again and pay the lawyer
less and pay and pay the lawyer less money, stay
out of court if you can one way to one
sure far away, to stay out of court, to stay
(26:47):
out of probate, which in a lot of counties in
New York State can take.
Speaker 1 (26:51):
A really long time downstate, complete night.
Speaker 3 (26:53):
Oh yeah, especially right. You can be in probate for
over a year, you know, just to have the will
approved and to then receive the ability to administer the estate,
which you know, all of these assets are are tied
up for a long time and you're paying out. But
(27:14):
if you put your property in trust and make sure
that you've got everything buttoned up, the way it should be.
You can avoid probate, you can pass your assets to
your family members without going to court, and again it's
it's probably the best thing that you can do.
Speaker 1 (27:31):
You know.
Speaker 2 (27:33):
One thing that people don't really think about is if
you are leaving assets to non family members, right, like,
you don't want your family to get it, and that's
that's perfectly fine.
Speaker 1 (27:42):
Sure, the only person in New.
Speaker 2 (27:44):
York State that is absolutely entitled to a portion of
your state is a spouse, and they're only actually entitled
to a third, right, right.
Speaker 1 (27:51):
That's illegal.
Speaker 2 (27:52):
So I mean, you could leave two thirds to someone
else if you really wanted to. I'm not advocating that specifically.
I'm not advocating that in case my wife is listening.
But so, but if you're leaving things to friends and
you don't have children, let's say, it becomes really onerous
(28:14):
to do that in a probate probate proceeding.
Speaker 1 (28:17):
Easy for me to say, right.
Speaker 2 (28:19):
I met with someone this week that we're talking about
cousins yep as the just what we call distributees, people
who take in the absence of a will, and we're
talking about a number in the twenties of who we
have to serve, and we don't necessarily know where everybody is.
(28:42):
It's going to be a long ride and it's not
going to be inexpensive. And even you know in New
York you have the New York people, you have to
personally serve how to stay people. You can kind of
get around the personal service, but you still have to
do certified mail, and then you have to do proof
of delivery. And I mean twenty six let's just say,
(29:03):
if that were the number certified mails is certainly going
to be less than twenty six Personal service, but it's not.
And then I'm sure that some of these addresses will
not be correct.
Speaker 3 (29:15):
I have a current case Aaron where forty eight individuals
are entitled to service.
Speaker 2 (29:19):
Yeah, that's a nightmare, because all you need is one
with a screw.
Speaker 3 (29:25):
Loose, right, or they're going to start bouncing back, right.
Speaker 2 (29:29):
Or incapacitation, right. I mean, you get one that's in
a nursing home or under some kind of disability, and
you've just gone off the rails for a period of.
Speaker 3 (29:39):
Time guardian ad litem, right, And.
Speaker 2 (29:41):
You may not get your letters right away, right. You
have to ask for so when I say letters, when
you finally either a probate petition meaning there is a will,
or an ad administration petition meaning there isn't a will.
You get letters from the court, letters of administration or
letters testamentary, which are your authority to act on behalf
of the estate, and you can't really do much without them.
(30:04):
You can't martial assets, you can't open a bank account.
You're really not even supposed to be like accessing property.
Speaker 3 (30:09):
I don't think you can do a thing without them.
Speaker 2 (30:11):
Well, the gray area is real property where people are
trying to preserve personal property. So generally the recommendation is
to lock it down or if there's something particularly valuable,
to make sure that it's not because I think you've
seen once personal property is gone, it doesn't come back,
(30:31):
you know. Oh yeah, here's the diamond I took from mom.
I'm wearing it now. That never happens, It doesn't happen.
Speaker 3 (30:37):
Yeah. How many times do our clients come to us
with a list of things that went missing and we're
supposed to retrieve them, Right, never happened.
Speaker 2 (30:45):
That can happen in the guardianship world too. The judge
always says, we're not going backwards. Almost yes, right, yep, occasionally.
I did have a case where we initiated a lawsuit
against another person and did recover because they had essentially
stolen real property, and then when the house sold, we
got her money back. But that's unusual. And real property
(31:11):
is easier to attach. And what we mean by attached
is you can put what's called the least pendance on it,
which makes it very difficult to sell, and without coming
to an agreement of who's going to get what, you're
not going to be able to sell property, which you
can restrain a bank account, but it is not very
easy to do and takes pretty high level of proof.
(31:36):
So if you're in a situation where you have non
family beneficiaries, you need to be careful and think about
what you're leaving behind.
Speaker 1 (31:46):
And I say this obviously all the time.
Speaker 2 (31:48):
It won't be your problem, but what problems are you
leaving behind? And I think that's important. When people met
with some people this week, I did the planning for
their parent thirteen years ago, and it really was all
(32:09):
teed up. Yeah, it was easier for that, I mean
not easy. They lost a parent, which is a terrible situation,
but at least they didn't have to worry about how
this was going to be handled, and it's clean, it's
relatively easy, and it just gives people peace of mind.
It gives them one less thing to deal with.
Speaker 3 (32:29):
Yeah, I mean, try not to leave behind a court case, correct,
and here's my leg Okay, yeah, and you can do that.
You cannot leave behind a court case. You know, it's
happened in my family. Some you know, things tied up
for years and my grandmother we didn't even know she
(32:50):
was doing it. She did the planning all on our own,
and it was it was just such a breath of
fresh air. When my grandmother didn't leave the family. A
court case found out that we found it that all
of her assets transferred out of probate. Yeah, yes, I think,
you know, I think a tax attorney needed to be filed.
Speaker 2 (33:10):
But you know, yeah, yeah, I mean you can roll
the dice. I don't I don't advise that. I mean,
three out of my four grandparents did not end up
in a nursing home. But I don't think that that's
typically the case. And you want to be people think
that the transfer on death beneficiary is oh I did
(33:32):
my planning. Well, there's a lot of things that can
go wrong. With a transfer on death beneficiary. If your
beneficiary dies before you, you have no beneficiary. If your
beneficiary is becoming capacitated for some reason, and that really
happens more often than you think. I have emails from
clients where they're unfortunately their children have some fored a
stroke or something like that, and we don't want to
(33:54):
leave them money directly. And if you leave again a
person money directly like that, their spouse is going to
get acts sure, right, So that's not really a plan.
If you have everything in a trust, let's just say
an irrevocable trust, and you have a bank account that
you have control of. Yes, it's okay to have a beneficiary,
(34:14):
and we want you to have a beneficiary in that,
but that's not the ultimate plan for all of your assets, right,
and you need to be mindful of that. I've told
this story many times. My grandmother's aunt, so my great
grandmother's sister lived to be about ninety five or six,
and she was mean. And I thought she was just
(34:38):
mean because she was old. But my dad's cousin corrected
me on that and said she was just always mean
and that was just her personality. Never had any children,
so you think she'd be like just flying high, not
not a lot to be like you, annoying you in
your life. She had a lot of money when she
went into the tr Resian House in nineteen eighty one,
(34:59):
and when she died in nineteen ninety six, she didn't
really have any money, right, And the rules in nineteen
eighty one were you could have a trust that you
had full control over until you went into.
Speaker 1 (35:11):
The nursing home.
Speaker 2 (35:11):
Gotcha, the day you went in, you were triggered off.
And oh those were real rules, Like.
Speaker 1 (35:16):
It's like mind blowing.
Speaker 2 (35:17):
Yeah, oh, walked in sorry, a new trustee and your
money wasn't available. I mean you could do that until
nineteen ninety three or ninety four.
Speaker 3 (35:25):
So I think that's another person. Yeah. I think that's
another good point, Aaron. I think a lot of people
have the misconcept conception that when you place your assets
into trust that you don't have any access to them.
I think when people come in, we tell them, like, listen,
you can be the grand tour of your trust, meaning
you're the one who contributes the assets to the trust.
(35:47):
You can be also the trustee and the beneficiary. You
can be all three and you still have access to
your money, but it's protected from from other factors. I
think that's what people have a misconception in about two
is that you don't lose your assets when you put
them in trust. All you're doing is protecting them, but
you still have access to them.
Speaker 1 (36:07):
Well, it depends on the type of trust, right right.
Speaker 2 (36:10):
In a revocable trust, you wear all three hats, and
an irrevocable trust you have a trustee that's someone other
than you because we need that separation.
Speaker 1 (36:17):
But you still can do so many things.
Speaker 2 (36:19):
You can change your beneficiaries, you can get money out
the back door, you can change your trustee at any time,
so it's not really as frightening. We're coming up on
our last break, so when we come back, I want
to talk about some things that can happen in the
trust world to make sure that you're getting what you're supposed.
Speaker 1 (36:37):
To be getting.
Speaker 2 (36:38):
This is Life Happens Radio Aaron Connor from Pierre O'Connor
and Strauss, and we'll be back right after this one.
Speaker 3 (36:50):
You look to see drive.
Speaker 2 (36:56):
By bread Stack and we have been talking about trusts,
a guardianships and what can go wrong and what can
go right.
Speaker 1 (37:05):
Hopefully you get more right than wrong.
Speaker 2 (37:07):
But we often are also encountering people who maybe mom
or dad set up a trust, or an ant or
an uncle or who knows right, could be anybody, could
be their neighbor, and they're a beneficiary, but not generally
the trustee, because in the world of trustees, there are
(37:30):
many choices. It could be an individual. Sometimes it's an accountant.
Once in a while it's a lawyer. I can tell
you though that nine times out of ten, and a
lawyer is a bad choice as a trustee. One for inattention.
Two they are not an investment professional. So if you
hire a lawyer as a trustee, and that's really what
(37:51):
you're doing, because any trustee is entitled to a commission
for serving and being a fiduciary. Meeting someone who has
to act in the best interests of an other person,
they're going to have to hire an investment advisor, which
you're also going to pay for it. So there are
trust companies out there. There are investment houses that have
separate trust divisions. There are some investment houses that don't
(38:14):
have trust divisions, but the bigger ones typically do, and
we see a lot so generally in my experience, when
people appoint a corporate trustee.
Speaker 1 (38:23):
It's because they.
Speaker 2 (38:25):
Don't think that their children can manage the money, or
we'll spend it poorly. Because a corporate trustee, while applying
the same standards, has a lot more to lose than
an individual trustee.
Speaker 3 (38:39):
Right, And they're also objective.
Speaker 1 (38:41):
Right.
Speaker 2 (38:42):
So if it says it can only come out for X, Y,
and Z and U as for a well you're not
going to get it.
Speaker 3 (38:47):
Oh, yes, And I think you're right. A corporate trustee
is going to be hold the purse strings a lot
tighter than you know, a family member or someone.
Speaker 2 (38:57):
Right, it's going to have and even and it has discretion,
it's going to be less likely to use it.
Speaker 3 (39:04):
Correct.
Speaker 1 (39:06):
You're going to be required to document a need.
Speaker 2 (39:08):
So if your kid is going to college and you
want money for college, well, if they're in their freshman
year of high school, you're not going to get it, Okay,
probably going to have to present a tuition bill that's
out saying you know what the cost actually is, and
then they will decide what to pay. They may pay
(39:30):
all of it, they may pay none of it, and
they may pay some of it.
Speaker 3 (39:34):
I think that's that's a good point too. With a
lot of trusts are for educational purposes, and I think
what we're running into a lot is what really is
the cost of education? Because college is now they have
a tuition bill, but a lot of colleges also have
mandatory fees, and it's like, how can you separate tuition
from mandatory fees? Well, books, our books part of the
(39:56):
no and there that's separate. So I think right now
I have a couple of cases where we're interpreting the
language of the trust to see exactly what the beneficiary
is entitled to. And I think that that's what you're
talking about.
Speaker 1 (40:10):
Yeah, I mean so to date myself.
Speaker 2 (40:13):
But in nineteen ninety four, when I was a freshman
in college, okay, my books were five hundred dollars for
one semester. I can't imagine they're the same amount of
money now. I'm sure that they're more right, And some
of those were softcover books, which I remember.
Speaker 1 (40:29):
It aggravated me at the time.
Speaker 2 (40:31):
My astronomy textbook and I went to a place where
you could not see the stars at night because the
city lights were so bright, so it was really a
strange place to take astronomy. But I didn't really like
my other science choices. So anyway, but books, books can
be very expensive, so if you don't have other means,
(40:53):
that could be a problem. You know, I think most
of the time, someone who establishes trust to pay for
educational purposes is trying to avoid that person being burdened
by loans exactly, because as a law school graduate, I
can tell you I'm burdened by loans, right, not as
bad as some people, but I mean I've been out
(41:15):
almost twenty years and.
Speaker 3 (41:15):
I still have a law school loan.
Speaker 1 (41:17):
So if you go to.
Speaker 2 (41:21):
Undergrad and then to graduate school, you could owe like
an enormous amount of money. So if that is in
fact the intent, and then you're denying let's say books
or maybe even housing, right, Well, let's say there's somebody
around here and let's say they want to go to Siana,
(41:42):
but they want to live on campus, right, the trustee
may actually deny that portion. They could and frankly, they
could probably support that if they wanted to. And some
of what that's going to depend on is how much
money is sent the trust. Then how would you go
about finding that out?
Speaker 3 (41:58):
Well, in that case, when people when beneficiaries come to
us and they say you know I'm entitled to education
from this trust, and the trustee is saying, yeah, but
I'm not going to pay for your books. What you
and I would do is we would file a Supreme
Court proceeding for an accounting of that trust. We would
(42:20):
have the trustee come in and provide us with the
way that they have administered that trust from the inception
of the trust to when they started paying it out.
What have they paid and for what? And what are
the expenses? What are the expenses?
Speaker 2 (42:36):
And from tax filings, what have they taken in commission?
What have they paid out to themselves?
Speaker 1 (42:42):
Maybe? Right? Right? If it's a brother or sister or
some family member.
Speaker 3 (42:45):
And how are they doing as a fiduciary.
Speaker 1 (42:48):
And how are they right? Exactly? So have the investments
performed well? Right?
Speaker 2 (42:52):
If you had a trust that didn't make money in
twenty twenty four, we have a problem, right, right, it
didn't make money in twenty twenty five, well, and coming
back around exactly, yeah, so you'd.
Speaker 1 (43:05):
Have a defense at least there.
Speaker 2 (43:07):
But as a fiduciary, you are charged to do the
best with the money that you can.
Speaker 1 (43:13):
Yep.
Speaker 2 (43:13):
So, I mean honestly, probably now, if you had it
in an interest sparing account that was getting a rate
like four or five percent like you see in some offers,
you probably would be okay, right, But most money is
invested in the market, yep, to make sure it's actually
making real money.
Speaker 3 (43:30):
Yeah, And that's what I think our clients don't at
first comprehend the scope of an accounting, but it's really
you know, it's not just an accounting of the money.
It's an accounting of how you performed your fiduciary duty.
Have you expended the funds and the trust for the
purposes that the grant are intended? And how how in
(43:50):
general have you done as a fiduciary. I mean, if
you're I think we have a lot of trust Aaron
that you know, the trustee has a purpose to spend
moneys for a certain individual. But then what we have
is residuary beneficiaries. And who is the trustee really looking after?
Are they looking after the individual who is named in
(44:13):
the trust or receive the funds, or they looking after
the residuary beneficiary who gets all that's left old they
may like better, who they might like better, right, and
might be and might be you know, preserving some funds
that otherwise should be expended for the purpose of the trust.
Speaker 1 (44:30):
They might ultimately be that beneficiary, and.
Speaker 3 (44:31):
They might be that beneficiary too. Yeah, it's a conflict
of interest in a lot of ways. But that's how
we get after That's how we get at.
Speaker 2 (44:40):
Right, And it's a way for us to decide whether
we feel like we need to move to remove a
trust correct because most times we don't have information that
shows us. It's a high burden of proof because you
can't just go in and say I don't like this person.
Speaker 3 (44:54):
That's not how it works exactly.
Speaker 1 (44:55):
They have to violated their fiduciary duty.
Speaker 3 (44:57):
We have to see how they're performing right, either.
Speaker 2 (44:59):
Sell dealing, if they had taken money, if they have
not followed the terms of the trust, you know, fraud,
all sorts of things, but number one would be self
dealing or a form of self dealing. Whereas if they
maybe are the trustee and the beneficiaries are their kids
and your kids, and their kids seem to be doing better,
(45:21):
you know.
Speaker 1 (45:21):
Getting more things. Absolutely, so those things happen.
Speaker 2 (45:25):
They don't just happen in movies, but they happen in
real life too.
Speaker 3 (45:30):
And I think that's another good point too. Is if
you're coming to us or to whomever to establish your trust,
make sure that you identify, you know, pick the right trustee,
pick the right beneficiaries, try to avoid conflicts of interest
at all costs.
Speaker 2 (45:47):
Well, oftentimes I'm recommending something called the unit trust to people,
and that way, a set percentage comes out every year. Right,
maybe five can be more than that, but five is
a typical number, yep. And that way can be invested
for a growth, right, and not worried about income, and.
Speaker 1 (46:05):
There's less discretion involved. Right.
Speaker 2 (46:06):
If you think there's going to be a problem, or
you think somebody isn't really great with money, you can say,
here's your set amount. It can come out quarter, annually,
it can come out annually, whatever, and eliminate that a
lot of the discretion. And by eliminating a lot of
the discretion, you can eliminate a lot of potential for
a lawsuit. You can't eliminate an accounting, right because we
(46:29):
need to be able to determine whether somebody's doing what
they're supposed to be doing.
Speaker 1 (46:32):
But there would be less discretion and a trust like.
Speaker 3 (46:35):
That, And it's also I think important to note that
any beneficiary can request or demand compell and accounting at
any time, and I think that's the number one layer
of protection for a beneficiary is that you have the
right to compel on accounting and that's how you're going
to find out how the money is being spent. If
(46:56):
you're kept in the dark, that's what you do right.
Speaker 2 (47:00):
Oftentimes there's concerns that the lawyer is taking too much
money too, so that's important and we can figure that out.
So we're coming to the close of the show. I
just want to say that this week we had our
big Elder Law Forum at the Desmond So if you
attended or watched online, thank you very much. That's our
(47:20):
signature event, really one of two big events during the
year and registructure legislators and people from the government to
talk about what's going on in long term care and
manage long term care, so very important stuff. If you
didn't get a chance to watch, please look online to
see what is available. And if you have an issue,
(47:42):
please give us a call or email us at the office.
Speaker 1 (47:45):
The office number is five and eight four.
Speaker 2 (47:48):
Or send us an email at info Atperro law dot com.
That's pie r R Law dot com. We will be
back next week. Thanks for listening. Everybody, have a great weekend.
Are you prepared?
Speaker 2 (00:00):
This is our weekly radio program for individuals and their
families where we address the challenges we all.
Speaker 1 (00:05):
Face as we age.
Speaker 2 (00:06):
We talk about aging as a lifestyle, the issues that
must be confronted, and the careful planning that's required to
avoid crises in the future. Life Happens will provide you
with tools to educate and prepare yourself for events like retirement,
protecting your income and assets, planning to pay for nursing,
home and home care, special needs, willson trusts, planning for
an untimely death, and resolving disputes in and out of court.
(00:28):
I'm Aaron Connor from Pure o' connor and Strauss, joined
this week by Brent Stack. Good morning, Brent, Good morning, Aaron.
If you don't know, Brent's been with us almost a year.
Speaker 3 (00:39):
Now, right since July of twenty four.
Speaker 2 (00:42):
Yeah, so we're getting there. Brent does the litigation with me.
He probably more specializes in guardianships than trust litigation at
this point, but he's learning, learning.
Speaker 1 (00:58):
As we go.
Speaker 3 (00:59):
We do the messy stuff.
Speaker 2 (01:00):
That's right, you know, if you and your sister or
you and your brother don't like each other. Now while
mom and dad are alive, it doesn't usually get better.
Mom and dad are usually kind of the referee in
that situation or like an anchor in it. Like I
(01:22):
don't mean that in a bad way, dragging you down.
I mean that like it's a kind of like the
sun with you know, pulling you in right.
Speaker 3 (01:29):
Yeah, the shatters that we've seen in families when mom
and dad go right.
Speaker 2 (01:34):
Because people don't necessarily have to behave anymore right like
people should behave. And sometimes it's justified, and sometimes it's
you've got a tricycle when you were three and I
did not, and it just never gets better. It honestly
is amazing to me how many people like actively keep
score over their lifetime.
Speaker 3 (01:55):
Yeah, I agree, and I think a lot of these
people don't see it coming right, and it makes me,
you know, it's sad. I want to go home and
hug my sisters.
Speaker 1 (02:07):
Well.
Speaker 2 (02:07):
Obviously, having a good family dynamic is much better, right.
And one of the issues is the more people you have,
the harder it is to get along, just because there's
that many more personalities. You know, there may be five
of you, and four of you get along great, but
then there's one person or.
Speaker 1 (02:26):
I mean.
Speaker 2 (02:28):
A lot of times there's a component of mental illness
to someone, right, Yeah, sure, And in the older generation
a lot of undiagnosed mental illness, untreated medicated if that's
the appropriate course, but even lack of any kind of
therapeutic and just acknowledgment. And what I've seen is when
(02:51):
people age, it doesn't get better, it gets worse. Sure,
So if that's out there, you know, some things are
on ofa We try to put a plan in place
that avoids every kind of strife possible.
Speaker 3 (03:04):
I think you're right, planning, planning, planning.
Speaker 2 (03:06):
And but ultimately I used to work for a guy
who would say you could sue the pope for adultery. Right,
you don't really have to have like a claim that
needs to make a lot of sense to make people's
lives difficult. Now, hopefully there's no lawyer is going to
take a case that doesn't really have any merit, But
that doesn't stop people from acting what we say is
(03:27):
pro se, meaning without a lawyer, which is kind of
the ultimate nightmare in a courtroom. We have at least
one large case with a pro se litigant, and that
has already gone on I think since twenty eighteen. I
can't say, for sure, but it makes it more difficult,
(03:50):
certainly makes it almost impossible to settle anything, absolutely, because
you can make a very good offer and there's nobody
to really guide that person to say what will happen
when you don't.
Speaker 3 (04:03):
Yeah, I think the pro say litigant is extraordinarily skeptical
and they don't know what they don't know about procedure.
Speaker 1 (04:15):
Right. Procedure is very important.
Speaker 2 (04:17):
In a court, and that means how you initiated a
case in a lot of ways. Right, so whether it's
a complaint or a petition, and serving people, serving the
right people, serving them timely, having the contents of a
petition or a complaint that actually have to.
Speaker 1 (04:37):
Be there, which in a lot of ways is.
Speaker 2 (04:41):
Not terribly difficult in the Internet era, but sometimes like
fraud for instance, has a higher pleading requirement, certain things
like that, but service is usually a big trip up
for even serving the right people.
Speaker 3 (04:57):
Yeah, it is specialized. I mean we did learn some
thing in law school, correct. I mean there's a reason
that we that we exist in this field. There's a
reason that the courts, you know, appreciate our skill set,
our specialty.
Speaker 2 (05:15):
I mean we're not even talking about like substantive stuff
right exactly, you actually have a case, can you get
into the court right and before.
Speaker 3 (05:23):
A judge exactly, Because we're not talking merits here, we're talking.
Speaker 2 (05:27):
Right basics, right, because I've seen lots of these just
get rejected out right because they don't meet the filing requirements.
Filing fee doesn't get paid, people don't get served, and
you only get so many cracks at this exactly.
Speaker 1 (05:42):
Sometimes you only get one crack.
Speaker 2 (05:44):
So it's important to have some some guidance and some
knowledge and to have a case ultimately right.
Speaker 1 (05:53):
But if you do end up in.
Speaker 2 (05:58):
A situation where it's sibling versus sibling, I I hope
for your sake that everybody has their own counsel, because
it just makes things extraordinarily difficult.
Speaker 3 (06:06):
Yeah, there's a lot of pitfalls before you can get
to merits. I think. I think that's the point that
we're trying to make here.
Speaker 2 (06:11):
And people tend to dismiss the counselor part of being
a lawyer. A lot of what we are doing is
really counseling people on what the best course of action is,
and they're free not to take our advice. I'm often
surprised how many people pay me and then don't do
what I tell them to do.
Speaker 1 (06:30):
Right, you're paying for my advice, and you know you're
you have agency, You're free to do what you want
to do.
Speaker 3 (06:38):
But I think you're you're exactly right. I mean, I've
found myself a lot in the last few weeks just
those making those difficult phone calls, just saying hey, this
is this is where we might get to, but this
is where we should go.
Speaker 2 (06:53):
And well, winning a court case is not necessarily the
end of anything, right, absolutely, because people have the right
to appeal, and appeals can go on not forever, but
basically forever, and it's not good for anyone. I spend
a lot of my time talking clients about the emotional
(07:15):
damage or cost of continuing. And if this is a
case where someone has died, you're likely not even grieving
that because you are continuing to plow through this. And
sometimes that may be necessary. But when we can get
to a point where it's just about as good as
it's going to get, we have to be realistic. And
(07:37):
I'm sure everyone listening understands this, but Brett and I
do not work for free, and the longer that we work,
the less you are recovering, generally speaking, from the same
pool of money.
Speaker 3 (07:49):
That's absolutely the case. Yes, some you know, some of
our unfortunate clients have jumped immediately into litigation following the
death of a loved one, and I can guarantee that
they have not grieved because they've been in the fight
since since that day. Yes, And you know, I think
(08:10):
it's just the further it drags out. I think the
larger the emotional toll it plays on the entire family.
And you know, I think our clients say a lot
of times, you know, I can't wait to take so
and so to court. But that's that's really not what
you want.
Speaker 2 (08:29):
It is really and we say it all the time.
The only people who went in court are the lawyers, right,
And we do get good results for our clients. We
do time, we do, but sometimes it's better to negotiate
that ahead of time.
Speaker 3 (08:44):
Sometimes you get that person in the you know, sometimes
you do get that person to court and the judge
will say, go out in the hallway and figure this out.
And that's not what people want to hear. They think
that court is where, you know, they can strike someone
down with a lightning bolt, and.
Speaker 2 (08:58):
They think it's going to be like a law order episode, right,
and in reverse, we're going to court first and they'll
go to jails.
Speaker 3 (09:05):
Right exactly. So it's we're here to help you resolve
your own disputes, but ultimately you're gonna need to participate
in resolving your own disputes with your with your loved
ones and with others.
Speaker 2 (09:20):
And I will say this, there are people who sometimes
contact us and they say, can you write my sister
a letter? We absolutely will not do it. Okay, that
is fruitless, nasty. G No, don't do it. Not interested,
gets no results. Just so, we usually do want to
be in a court context sooner rather than later, because
nothing gets resolved outside of that. But how we get there,
(09:44):
and kind of the tenor of how we get there
is important as well.
Speaker 3 (09:49):
It is helpful when you when you get that man
or woman in a robe in a room, absolutely because
everyone kind of they'll.
Speaker 2 (09:56):
Say, this is your problem, and this is your problem,
and I'm not making a decision, but you you both
have problems.
Speaker 3 (10:04):
It's helpful for you and I to get a judge involved.
Speaker 2 (10:08):
It's very rare that they say you are great and
you are terrible.
Speaker 3 (10:12):
That very rarely happens exactly. We stay in the gray
an awful lot.
Speaker 2 (10:20):
But so if you're looking for complete vindication, the courtroom
is generally not right.
Speaker 3 (10:25):
Yeah, yeah, right, yeah exactly. I think you're right. No
one's going to get one hundred percent win. We see
that very rarely. I mean it's not it would take years.
It would take years.
Speaker 1 (10:35):
And thousands upon thousands of dollars to do that.
Speaker 2 (10:39):
And it's really the judge is not interested in that either.
The judge is interested in solving the problem in a
fairly reasonable and quick way.
Speaker 1 (10:50):
So we're coming up on our first break.
Speaker 2 (10:52):
When we come back, we're going to continue and talk
about state litigation and trust litigation.
Speaker 1 (10:57):
This is Life Happens Radio, and we'll be back after this.
Speaker 3 (11:04):
One.
Speaker 1 (11:06):
You look welcome back to life. I am Aeric Connor
from Femal count Instruments. We are in the state planning
law firm.
Speaker 2 (11:14):
We do also do medicaid work, in guardianship work, and
a state and trust litigation.
Speaker 1 (11:19):
I'm joined by Brent Stack.
Speaker 2 (11:20):
He is also a litigator by trade. So we are
talking about litigation shocking. We were talking about some of
the problems that can't be solved by litigation in the
first segment. There are problems that can be solved by
litigation too.
Speaker 3 (11:37):
Yes, sometimes it is necessary.
Speaker 2 (11:38):
Unfortunately it's unpleasant and stressful, but there's sometimes that it's
just not going to get done otherwise. And these can
be in estates, they can be in trusts, they can
be in a guardianship. So a lot of times this
happens when mom or dad is alive, right, Usually not
(12:01):
both right. I have had a rare occasion where we
have alleged that both mom and dad are incapacitated, But
that's unusual. Usually it's the survivor, and it may be
that they're not taking care of themselves. This could be,
you know, house could be in disrepair. We've seen all
sorts of garbage and animals and infestation.
Speaker 3 (12:23):
And a lot of financial abuse. Also, we see a
lot of financial abuse where.
Speaker 1 (12:28):
That's the more common.
Speaker 3 (12:29):
You know, these these scams will it whether it be
online scams or phone scams. We've seen a lot of
of our alleged incapacitated people being taken financially being taken
advantage of financially, right.
Speaker 2 (12:48):
And most of these cases are not clearly incapacitated person, right,
I mean.
Speaker 3 (12:55):
Good days, good days and bad days.
Speaker 2 (12:57):
Right, when it's clear that someone is incapacitated, it's a
very easy is not the right word, but it's not
as difficult as it is when we have waning capacity, correct, Right,
because having been a court evaluator, right, and the person
that is a court evaluator, their role in a guardianship
(13:18):
is to interview people and review documents and see what
the facts are and see what capacity is like, and
to come to a set of recommendations. That is someone
appointed by the court who is a neutral and Brent,
you've been in that role.
Speaker 3 (13:34):
Yeah, kind of the eyes in the ears of the court, right,
take all take the entire story and present it to
the court with a set of recommendations.
Speaker 1 (13:43):
Because the truth is usually somewhere in between.
Speaker 2 (13:45):
Absolutely, you get a petition that says X, Y, and z,
you're going to get an answer that says, probably that
none of that is true other than the person's name
and birth date, right, and maybe the kids are right.
Speaker 1 (13:57):
So, but and then it.
Speaker 2 (14:01):
Usually when you get a good court evaluator, they see
this person more than one time.
Speaker 1 (14:05):
Yes, because I've seen it many times.
Speaker 2 (14:09):
Someone with waning capacity can turn it on for a
short period of time.
Speaker 3 (14:14):
Yeah, capacity is a tough issue. You want to have
a conversation that lasts more than ten minutes because you
can you can see some of these people oriented to
time place who the president is right, But then all
of a sudden, you know, things start to slip, and
(14:37):
I think that's tough for family members. They don't they
don't see that. I think, like you said, with waning capacity,
it's it's almost like when you you're driving your car
in your own breaks start to go. You know, you
just press a little bit harder on the pedal each time,
and you don't really comprehend that things have gotten out
of control.
Speaker 2 (14:59):
Right the time you're Fred Flinstone stopping the cars with
your feet. We've got a real problem.
Speaker 3 (15:04):
Exactly, right exactly, And unfortunately that's that's where we come in.
But you know, we can come in then and help
you sort through your your incapacity issues in terms of
getting a guardian appointed for your loved one. And there
are a lot of things that a guardian can do
(15:24):
to kind of right these wrongs. You take over financial control,
you can stop that financial abuse. You can get more
of protection against whoever the financial abuser is. We can
help with nursing home placement. The guardian can can do
nursing home placement, I think the only thing that And
it's important to note there are limitations on guardianship. You
(15:45):
can't place your loved one in a mental institution or
a drug and alcohol facility, and you can't you can't
write a new will.
Speaker 1 (15:54):
Yeah.
Speaker 2 (15:54):
I mean a lot of times people come to us
and they are trying to get guardianship over a relative,
usually who has mental illness, and it is very difficult
unless that person is willing to give you guardianship. The
problem with even with that, though, is if they change
their mind, it can be a big problem. A little
(16:16):
known kind of provision of the guardianship world is that
if you want to terminate a guardianship, the burden is
on the person who wants to keep the guardianship, not
the person who's under a guardianship right, And in my opinion,
that's probably the pendulum swinging too much, too far to
the rights of the incapacitated person, because we're talking about
(16:40):
a person at that point who's already been determined in capacity.
There's no allegation they've gone through a factual hearing or
they've agreed which is a little bit different than they're
technically a person.
Speaker 1 (16:51):
In need of a guardian.
Speaker 2 (16:54):
But so maybe under those circumstances it makes a little
more sense. But predominantly we don't agree to a person in
need of guardian. We're agreeing to you know, a lot
of the contest is over who the guardian.
Speaker 3 (17:08):
Is a lot most of the time.
Speaker 2 (17:11):
There's occasional cases where capacity is an issue and the
person alleged to be incapacitated is fighting, but usually that
doesn't win.
Speaker 3 (17:24):
Out right, and it's it's a tough it's a tough
hearing when you know, when you're alleging that your loved
one is a person in need of a guardian, you
have to put on proof in front of them, correct,
you know they're at the hearing, you're alleging all of
their functional limitations, and it's very uncomfortable. So oftentimes we
(17:49):
find that, you know, a more favorable outcome is someone
agreeing to being a person needing a guardian, not an
capacitated person.
Speaker 2 (18:01):
And they tend to like that better as well, because
they're not deemed incapacity.
Speaker 3 (18:05):
Absolutely, and and I do think you know when you
are determined to be an incapacitated person. I think that
the court has as some reporting requirements. I think that
you kind of you might be flagged as a person
who's incapacitated rather than a person who's consented to having
a guardian, right, and so there are there are future consequences.
(18:29):
And also, yes, these these proceedings are uncomfortable for families.
It's not a situation you want to have yourself involved in.
So that's why we often recommend that you get yourself
lined up with a health care proxy and a power
of attorney. The court at a bare minimum, the courts
(18:52):
will not appoint a guardian for you if you have
those things in place. So I think gets recommended that
all families, as people age, you do your planning, you
get your health care proxy, you get your power attorney,
you set up your trusts, you get your wills in order,
(19:12):
and then you can avoid avoid coming into court under
these unfortunate circumstances.
Speaker 2 (19:17):
Right. The best guardianships, if you will are Mom or
Dad agrees to who the guardian should be, and it
really can be like a.
Speaker 1 (19:29):
Ten or fifteen minute hearing. Absolutely, yeah, that's the best
it gets. And those happen.
Speaker 2 (19:37):
But to be fair, We've probably spent it close to
ten thousand dollars to get to that point. So you know,
I'm not going to say what a power of attorney
and health care proxy costs, but as well less than
ten thousand, absolutely right, So you don't want to be
there if you don't have to, It's better to pick
(20:00):
who you want to be in charge. That's the other
thing that maybe people don't consider is that in a guardianship,
the person in charge isn't necessarily the person you would
have been appointed, right, right, Maybe the person with a
better lawyer.
Speaker 1 (20:14):
Right.
Speaker 2 (20:15):
It may be that the person you would have appointed
has some issue right that you could have appointed.
Speaker 1 (20:25):
So I don't know.
Speaker 2 (20:27):
Let's say five years ago, it was a complete bar
if a person had a felony to be in a
guardian correct, right, and I.
Speaker 1 (20:35):
Certainly understand the thinking.
Speaker 2 (20:37):
But relatively recently in the legal world that was changed
to it's a factor, but it's not a complete bar.
And it may be some kind of felony that's I
don't know, not related to the types of things that would.
Speaker 3 (20:54):
Matter, right. I think it's yeah, I think you've you've
got Department of Social Services is your guardian of last resort.
They're overwhelmed. You don't with that with guardianships, they're short
on staff. It's not it's not ideal for your loved
(21:15):
one to have the commissioner of Social Services become their guardian.
Speaker 2 (21:19):
Right, which really means that an attorney in that department
is probably.
Speaker 3 (21:24):
There, right, and a social worker ye, and you're gonna
your minimum visits per year, et cetera.
Speaker 1 (21:31):
There's just four right, which isn't a lot.
Speaker 3 (21:34):
It's it's not a lot. You've got your there's a
it's it's called the Part thirty six list, which is.
Speaker 2 (21:41):
It's the choice, it's the thirty sixth choice that you
would actually want to be your guardian.
Speaker 3 (21:47):
It's called that, and that's not a great result. So
the courts have loosened the the prohibition on felon's sometimes
your family. Sometimes your family felon is uh is a
better guardian than social services or a Part thirty six lists.
Speaker 2 (22:08):
So I mean, if the felony is embezzlement and mom
or dad has some money, they're not going to get
to move typically yet without about typically financial any any
sort of that, fraud or physical abuse, that would probably
be the bar. As elder abuse, the elder abuse certainly
(22:29):
certainly would be as seen as a problem. But yes,
you you know, something like arson, if it's okay, all
right with that?
Speaker 3 (22:37):
Yes, okay, Now that one.
Speaker 1 (22:40):
Directly we try to do.
Speaker 2 (22:42):
We ultimately are trying to put a plan in place
to make sure you're covered, to make sure your loved
ones get or your beneficiaries get what they're supposed to get,
and the people who you do not want to get
things do not. And that may be removing you may
be removing a beneficiary, or you may be making sure
that a let's say, a child's spouse doesn't end up
(23:06):
with all the money or some other predator. As we say,
that's important to our clients quote unquote bloodlining the money right,
And in most situations a trust can continue on for
a very long period of time. Now New York has something,
at least for now called the Rule against perpetuities, right,
(23:29):
which is a question on the bar exam that ninety
percent of the attorneys never comes up right, But in
real practice it doesn't right. I mean, the thing is
so essentially the rule of perpetuities time is about one
hundred and twenty years because.
Speaker 3 (23:48):
Lives and being plus twenty one.
Speaker 2 (23:50):
That's right, right, So, I mean the longest anyone's ever
lived is about one hundred and fifteen years exactly. So
if you roll the dice and you got that person, great, right,
but unlikely. So let's just say you had somebody live
into their nineties, you get twenty one years. You got
about you know, rough math, lawyer math, one hundred and
(24:10):
twenty years best case scenario in New York. In the
state like Delaware, you can have what's called the dynasty
trust that can essentially go on forever if you have
enough money, right, and you know, let's be honest, very
few people have enough money to create like a long
lasting dynasty trust like DuPont. Like the DuPont family, it
(24:32):
was very involved in Delaware. They owned a lot of
property in Delaware, and they had a lot to do
with how the laws were drafted in this favorable way,
and the DuPont family would be a family that still
have generational wealth well downstream yep.
Speaker 1 (24:51):
But you can still create.
Speaker 2 (24:53):
Kind of your own I don't know many dynasty trust
If you want what we try to make sure that
money goes to your kids, not their spouse. And then
if something happens to your child. That goes to your
grandchildren again, not to the spouse. Right, if you wanted
to go to the spouse, hey, great, we can make
that work too. But that's that's like two percent of people.
Speaker 3 (25:15):
Yeah, I think you're right. I didn't do Uh, I
didn't do a lot of trust litigation before I came
to the firm, right, And I've been learning a lot
about trust since I've been at the firm, and I
think what a lot of people don't know. I think
you're right. Some people are afraid of irrevocable trust or
trust in general. But I think you're right. I mean,
(25:36):
it's not just for the rich, it's not just for
the DuPonts. It's for everybody. It's it's by far the
best way to protect your assets and your wealth and
to pass it on, like you said, to who you
want to receive it, and to protect it from who
you don't want to receive it, including the government if
we're la you know, absolutely, I think that's uh, it's
(25:59):
really important. You know. I've been telling my family members
since I've started working here. You need to get in.
You need to do this right. You don't have to
have a million dollars, right, you know, any amount of
wealth and you don't. It's not just money, it's not
just cash. Well, it's your home.
Speaker 1 (26:16):
It's the easiest thing to put in the trust.
Speaker 3 (26:17):
Is property, exactly right.
Speaker 1 (26:19):
And if you own.
Speaker 2 (26:20):
Property in two states, you really want to trust because
you don't want your family probating in.
Speaker 1 (26:24):
Two places exactly absolute disaster.
Speaker 3 (26:26):
Yeah. Money wise, yeah, I mean too. I think we've
said it before on the show, but the best gift
that you can give your family when you pass is
the ability to avoid probate again and pay the lawyer
less and pay and pay the lawyer less money, stay
out of court if you can one way to one
sure far away, to stay out of court, to stay
(26:47):
out of probate, which in a lot of counties in
New York State can take.
Speaker 1 (26:51):
A really long time downstate, complete night.
Speaker 3 (26:53):
Oh yeah, especially right. You can be in probate for
over a year, you know, just to have the will
approved and to then receive the ability to administer the estate,
which you know, all of these assets are are tied
up for a long time and you're paying out. But
(27:14):
if you put your property in trust and make sure
that you've got everything buttoned up, the way it should be.
You can avoid probate, you can pass your assets to
your family members without going to court, and again it's
it's probably the best thing that you can do.
Speaker 1 (27:31):
You know.
Speaker 2 (27:33):
One thing that people don't really think about is if
you are leaving assets to non family members, right, like,
you don't want your family to get it, and that's
that's perfectly fine.
Speaker 1 (27:42):
Sure, the only person in New.
Speaker 2 (27:44):
York State that is absolutely entitled to a portion of
your state is a spouse, and they're only actually entitled
to a third, right, right.
Speaker 1 (27:51):
That's illegal.
Speaker 2 (27:52):
So I mean, you could leave two thirds to someone
else if you really wanted to. I'm not advocating that specifically.
I'm not advocating that in case my wife is listening.
But so, but if you're leaving things to friends and
you don't have children, let's say, it becomes really onerous
(28:14):
to do that in a probate probate proceeding.
Speaker 1 (28:17):
Easy for me to say, right.
Speaker 2 (28:19):
I met with someone this week that we're talking about
cousins yep as the just what we call distributees, people
who take in the absence of a will, and we're
talking about a number in the twenties of who we
have to serve, and we don't necessarily know where everybody is.
(28:42):
It's going to be a long ride and it's not
going to be inexpensive. And even you know in New
York you have the New York people, you have to
personally serve how to stay people. You can kind of
get around the personal service, but you still have to
do certified mail, and then you have to do proof
of delivery. And I mean twenty six let's just say,
(29:03):
if that were the number certified mails is certainly going
to be less than twenty six Personal service, but it's not.
And then I'm sure that some of these addresses will
not be correct.
Speaker 3 (29:15):
I have a current case Aaron where forty eight individuals
are entitled to service.
Speaker 2 (29:19):
Yeah, that's a nightmare, because all you need is one
with a screw.
Speaker 3 (29:25):
Loose, right, or they're going to start bouncing back, right.
Speaker 2 (29:29):
Or incapacitation, right. I mean, you get one that's in
a nursing home or under some kind of disability, and
you've just gone off the rails for a period of.
Speaker 3 (29:39):
Time guardian ad litem, right, And.
Speaker 2 (29:41):
You may not get your letters right away, right. You
have to ask for so when I say letters, when
you finally either a probate petition meaning there is a will,
or an ad administration petition meaning there isn't a will.
You get letters from the court, letters of administration or
letters testamentary, which are your authority to act on behalf
of the estate, and you can't really do much without them.
(30:04):
You can't martial assets, you can't open a bank account.
You're really not even supposed to be like accessing property.
Speaker 3 (30:09):
I don't think you can do a thing without them.
Speaker 2 (30:11):
Well, the gray area is real property where people are
trying to preserve personal property. So generally the recommendation is
to lock it down or if there's something particularly valuable,
to make sure that it's not because I think you've
seen once personal property is gone, it doesn't come back,
(30:31):
you know. Oh yeah, here's the diamond I took from mom.
I'm wearing it now. That never happens, It doesn't happen.
Speaker 3 (30:37):
Yeah. How many times do our clients come to us
with a list of things that went missing and we're
supposed to retrieve them, Right, never happened.
Speaker 2 (30:45):
That can happen in the guardianship world too. The judge
always says, we're not going backwards. Almost yes, right, yep, occasionally.
I did have a case where we initiated a lawsuit
against another person and did recover because they had essentially
stolen real property, and then when the house sold, we
got her money back. But that's unusual. And real property
(31:11):
is easier to attach. And what we mean by attached
is you can put what's called the least pendance on it,
which makes it very difficult to sell, and without coming
to an agreement of who's going to get what, you're
not going to be able to sell property, which you
can restrain a bank account, but it is not very
easy to do and takes pretty high level of proof.
(31:36):
So if you're in a situation where you have non
family beneficiaries, you need to be careful and think about
what you're leaving behind.
Speaker 1 (31:46):
And I say this obviously all the time.
Speaker 2 (31:48):
It won't be your problem, but what problems are you
leaving behind? And I think that's important. When people met
with some people this week, I did the planning for
their parent thirteen years ago, and it really was all
(32:09):
teed up. Yeah, it was easier for that, I mean
not easy. They lost a parent, which is a terrible situation,
but at least they didn't have to worry about how
this was going to be handled, and it's clean, it's
relatively easy, and it just gives people peace of mind.
It gives them one less thing to deal with.
Speaker 3 (32:29):
Yeah, I mean, try not to leave behind a court case, correct,
and here's my leg Okay, yeah, and you can do that.
You cannot leave behind a court case. You know, it's
happened in my family. Some you know, things tied up
for years and my grandmother we didn't even know she
(32:50):
was doing it. She did the planning all on our own,
and it was it was just such a breath of
fresh air. When my grandmother didn't leave the family. A
court case found out that we found it that all
of her assets transferred out of probate. Yeah, yes, I think,
you know, I think a tax attorney needed to be filed.
Speaker 2 (33:10):
But you know, yeah, yeah, I mean you can roll
the dice. I don't I don't advise that. I mean,
three out of my four grandparents did not end up
in a nursing home. But I don't think that that's
typically the case. And you want to be people think
that the transfer on death beneficiary is oh I did
(33:32):
my planning. Well, there's a lot of things that can
go wrong. With a transfer on death beneficiary. If your
beneficiary dies before you, you have no beneficiary. If your
beneficiary is becoming capacitated for some reason, and that really
happens more often than you think. I have emails from
clients where they're unfortunately their children have some fored a
stroke or something like that, and we don't want to
(33:54):
leave them money directly. And if you leave again a
person money directly like that, their spouse is going to
get acts sure, right, So that's not really a plan.
If you have everything in a trust, let's just say
an irrevocable trust, and you have a bank account that
you have control of. Yes, it's okay to have a beneficiary,
(34:14):
and we want you to have a beneficiary in that,
but that's not the ultimate plan for all of your assets, right,
and you need to be mindful of that. I've told
this story many times. My grandmother's aunt, so my great
grandmother's sister lived to be about ninety five or six,
and she was mean. And I thought she was just
(34:38):
mean because she was old. But my dad's cousin corrected
me on that and said she was just always mean
and that was just her personality. Never had any children,
so you think she'd be like just flying high, not
not a lot to be like you, annoying you in
your life. She had a lot of money when she
went into the tr Resian House in nineteen eighty one,
(34:59):
and when she died in nineteen ninety six, she didn't
really have any money, right, And the rules in nineteen
eighty one were you could have a trust that you
had full control over until you went into.
Speaker 1 (35:11):
The nursing home.
Speaker 2 (35:11):
Gotcha, the day you went in, you were triggered off.
And oh those were real rules, Like.
Speaker 1 (35:16):
It's like mind blowing.
Speaker 2 (35:17):
Yeah, oh, walked in sorry, a new trustee and your
money wasn't available. I mean you could do that until
nineteen ninety three or ninety four.
Speaker 3 (35:25):
So I think that's another person. Yeah. I think that's
another good point, Aaron. I think a lot of people
have the misconcept conception that when you place your assets
into trust that you don't have any access to them.
I think when people come in, we tell them, like, listen,
you can be the grand tour of your trust, meaning
you're the one who contributes the assets to the trust.
(35:47):
You can be also the trustee and the beneficiary. You
can be all three and you still have access to
your money, but it's protected from from other factors. I
think that's what people have a misconception in about two
is that you don't lose your assets when you put
them in trust. All you're doing is protecting them, but
you still have access to them.
Speaker 1 (36:07):
Well, it depends on the type of trust, right right.
Speaker 2 (36:10):
In a revocable trust, you wear all three hats, and
an irrevocable trust you have a trustee that's someone other
than you because we need that separation.
Speaker 1 (36:17):
But you still can do so many things.
Speaker 2 (36:19):
You can change your beneficiaries, you can get money out
the back door, you can change your trustee at any time,
so it's not really as frightening. We're coming up on
our last break, so when we come back, I want
to talk about some things that can happen in the
trust world to make sure that you're getting what you're supposed.
Speaker 1 (36:37):
To be getting.
Speaker 2 (36:38):
This is Life Happens Radio Aaron Connor from Pierre O'Connor
and Strauss, and we'll be back right after this one.
Speaker 3 (36:50):
You look to see drive.
Speaker 2 (36:56):
By bread Stack and we have been talking about trusts,
a guardianships and what can go wrong and what can
go right.
Speaker 1 (37:05):
Hopefully you get more right than wrong.
Speaker 2 (37:07):
But we often are also encountering people who maybe mom
or dad set up a trust, or an ant or
an uncle or who knows right, could be anybody, could
be their neighbor, and they're a beneficiary, but not generally
the trustee, because in the world of trustees, there are
(37:30):
many choices. It could be an individual. Sometimes it's an accountant.
Once in a while it's a lawyer. I can tell
you though that nine times out of ten, and a
lawyer is a bad choice as a trustee. One for inattention.
Two they are not an investment professional. So if you
hire a lawyer as a trustee, and that's really what
(37:51):
you're doing, because any trustee is entitled to a commission
for serving and being a fiduciary. Meeting someone who has
to act in the best interests of an other person,
they're going to have to hire an investment advisor, which
you're also going to pay for it. So there are
trust companies out there. There are investment houses that have
separate trust divisions. There are some investment houses that don't
(38:14):
have trust divisions, but the bigger ones typically do, and
we see a lot so generally in my experience, when
people appoint a corporate trustee.
Speaker 1 (38:23):
It's because they.
Speaker 2 (38:25):
Don't think that their children can manage the money, or
we'll spend it poorly. Because a corporate trustee, while applying
the same standards, has a lot more to lose than
an individual trustee.
Speaker 3 (38:39):
Right, And they're also objective.
Speaker 1 (38:41):
Right.
Speaker 2 (38:42):
So if it says it can only come out for X, Y,
and Z and U as for a well you're not
going to get it.
Speaker 3 (38:47):
Oh, yes, And I think you're right. A corporate trustee
is going to be hold the purse strings a lot
tighter than you know, a family member or someone.
Speaker 2 (38:57):
Right, it's going to have and even and it has discretion,
it's going to be less likely to use it.
Speaker 3 (39:04):
Correct.
Speaker 1 (39:06):
You're going to be required to document a need.
Speaker 2 (39:08):
So if your kid is going to college and you
want money for college, well, if they're in their freshman
year of high school, you're not going to get it, Okay,
probably going to have to present a tuition bill that's
out saying you know what the cost actually is, and
then they will decide what to pay. They may pay
(39:30):
all of it, they may pay none of it, and
they may pay some of it.
Speaker 3 (39:34):
I think that's that's a good point too. With a
lot of trusts are for educational purposes, and I think
what we're running into a lot is what really is
the cost of education? Because college is now they have
a tuition bill, but a lot of colleges also have
mandatory fees, and it's like, how can you separate tuition
from mandatory fees? Well, books, our books part of the
(39:56):
no and there that's separate. So I think right now
I have a couple of cases where we're interpreting the
language of the trust to see exactly what the beneficiary
is entitled to. And I think that that's what you're
talking about.
Speaker 1 (40:10):
Yeah, I mean so to date myself.
Speaker 2 (40:13):
But in nineteen ninety four, when I was a freshman
in college, okay, my books were five hundred dollars for
one semester. I can't imagine they're the same amount of
money now. I'm sure that they're more right, And some
of those were softcover books, which I remember.
Speaker 1 (40:29):
It aggravated me at the time.
Speaker 2 (40:31):
My astronomy textbook and I went to a place where
you could not see the stars at night because the
city lights were so bright, so it was really a
strange place to take astronomy. But I didn't really like
my other science choices. So anyway, but books, books can
be very expensive, so if you don't have other means,
(40:53):
that could be a problem. You know, I think most
of the time, someone who establishes trust to pay for
educational purposes is trying to avoid that person being burdened
by loans exactly, because as a law school graduate, I
can tell you I'm burdened by loans, right, not as
bad as some people, but I mean I've been out
(41:15):
almost twenty years and.
Speaker 3 (41:15):
I still have a law school loan.
Speaker 1 (41:17):
So if you go to.
Speaker 2 (41:21):
Undergrad and then to graduate school, you could owe like
an enormous amount of money. So if that is in
fact the intent, and then you're denying let's say books
or maybe even housing, right, Well, let's say there's somebody
around here and let's say they want to go to Siana,
(41:42):
but they want to live on campus, right, the trustee
may actually deny that portion. They could and frankly, they
could probably support that if they wanted to. And some
of what that's going to depend on is how much
money is sent the trust. Then how would you go
about finding that out?
Speaker 3 (41:58):
Well, in that case, when people when beneficiaries come to
us and they say you know I'm entitled to education
from this trust, and the trustee is saying, yeah, but
I'm not going to pay for your books. What you
and I would do is we would file a Supreme
Court proceeding for an accounting of that trust. We would
(42:20):
have the trustee come in and provide us with the
way that they have administered that trust from the inception
of the trust to when they started paying it out.
What have they paid and for what? And what are
the expenses? What are the expenses?
Speaker 2 (42:36):
And from tax filings, what have they taken in commission?
What have they paid out to themselves?
Speaker 1 (42:42):
Maybe? Right? Right? If it's a brother or sister or
some family member.
Speaker 3 (42:45):
And how are they doing as a fiduciary.
Speaker 1 (42:48):
And how are they right? Exactly? So have the investments
performed well? Right?
Speaker 2 (42:52):
If you had a trust that didn't make money in
twenty twenty four, we have a problem, right, right, it
didn't make money in twenty twenty five, well, and coming
back around exactly, yeah, so you'd.
Speaker 1 (43:05):
Have a defense at least there.
Speaker 2 (43:07):
But as a fiduciary, you are charged to do the
best with the money that you can.
Speaker 1 (43:13):
Yep.
Speaker 2 (43:13):
So, I mean honestly, probably now, if you had it
in an interest sparing account that was getting a rate
like four or five percent like you see in some offers,
you probably would be okay, right, But most money is
invested in the market, yep, to make sure it's actually
making real money.
Speaker 3 (43:30):
Yeah, And that's what I think our clients don't at
first comprehend the scope of an accounting, but it's really
you know, it's not just an accounting of the money.
It's an accounting of how you performed your fiduciary duty.
Have you expended the funds and the trust for the
purposes that the grant are intended? And how how in
(43:50):
general have you done as a fiduciary. I mean, if
you're I think we have a lot of trust Aaron
that you know, the trustee has a purpose to spend
moneys for a certain individual. But then what we have
is residuary beneficiaries. And who is the trustee really looking after?
Are they looking after the individual who is named in
(44:13):
the trust or receive the funds, or they looking after
the residuary beneficiary who gets all that's left old they
may like better, who they might like better, right, and
might be and might be you know, preserving some funds
that otherwise should be expended for the purpose of the trust.
Speaker 1 (44:30):
They might ultimately be that beneficiary, and.
Speaker 3 (44:31):
They might be that beneficiary too. Yeah, it's a conflict
of interest in a lot of ways. But that's how
we get after That's how we get at.
Speaker 2 (44:40):
Right, And it's a way for us to decide whether
we feel like we need to move to remove a
trust correct because most times we don't have information that
shows us. It's a high burden of proof because you
can't just go in and say I don't like this person.
Speaker 3 (44:54):
That's not how it works exactly.
Speaker 1 (44:55):
They have to violated their fiduciary duty.
Speaker 3 (44:57):
We have to see how they're performing right, either.
Speaker 2 (44:59):
Sell dealing, if they had taken money, if they have
not followed the terms of the trust, you know, fraud,
all sorts of things, but number one would be self
dealing or a form of self dealing. Whereas if they
maybe are the trustee and the beneficiaries are their kids
and your kids, and their kids seem to be doing better,
(45:21):
you know.
Speaker 1 (45:21):
Getting more things. Absolutely, so those things happen.
Speaker 2 (45:25):
They don't just happen in movies, but they happen in
real life too.
Speaker 3 (45:30):
And I think that's another good point too. Is if
you're coming to us or to whomever to establish your trust,
make sure that you identify, you know, pick the right trustee,
pick the right beneficiaries, try to avoid conflicts of interest
at all costs.
Speaker 2 (45:47):
Well, oftentimes I'm recommending something called the unit trust to people,
and that way, a set percentage comes out every year. Right,
maybe five can be more than that, but five is
a typical number, yep. And that way can be invested
for a growth, right, and not worried about income, and.
Speaker 1 (46:05):
There's less discretion involved. Right.
Speaker 2 (46:06):
If you think there's going to be a problem, or
you think somebody isn't really great with money, you can say,
here's your set amount. It can come out quarter, annually,
it can come out annually, whatever, and eliminate that a
lot of the discretion. And by eliminating a lot of
the discretion, you can eliminate a lot of potential for
a lawsuit. You can't eliminate an accounting, right because we
(46:29):
need to be able to determine whether somebody's doing what
they're supposed to be doing.
Speaker 1 (46:32):
But there would be less discretion and a trust like.
Speaker 3 (46:35):
That, And it's also I think important to note that
any beneficiary can request or demand compell and accounting at
any time, and I think that's the number one layer
of protection for a beneficiary is that you have the
right to compel on accounting and that's how you're going
to find out how the money is being spent. If
(46:56):
you're kept in the dark, that's what you do right.
Speaker 2 (47:00):
Oftentimes there's concerns that the lawyer is taking too much
money too, so that's important and we can figure that out.
So we're coming to the close of the show. I
just want to say that this week we had our
big Elder Law Forum at the Desmond So if you
attended or watched online, thank you very much. That's our
(47:20):
signature event, really one of two big events during the
year and registructure legislators and people from the government to
talk about what's going on in long term care and
manage long term care, so very important stuff. If you
didn't get a chance to watch, please look online to
see what is available. And if you have an issue,
(47:42):
please give us a call or email us at the office.
Speaker 1 (47:45):
The office number is five and eight four.
Speaker 2 (47:48):
Or send us an email at info Atperro law dot com.
That's pie r R Law dot com. We will be
back next week. Thanks for listening. Everybody, have a great weekend.
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