When Can Your Child Decide Which Parent He/She Wants to Live With?
January 23, 2008 | Leave a Comment
One of our most frequently asked questions regarding a divorce here in Memphis or in Mississippi is “When can my child decide who they want to live with after my divorce.”
The answer is 18 (the age of majority). Until a child becomes an adult they may not decide on their own which parent to live with after divorce.
However, under both Tennessee child custody laws and Mississipi child custody laws, if a child is 12 or older the judge may hear testimony from the child (either in court or in chambers) as to the preference of the child. However the judge is not under any obligation to place the child in their preferred home. The preference of the child is merely one factor that the judge will consider in awarding custody to the primary residential parent.
The main consideration that the judge uses to determine custody is the best interest of the child. The preference of the child is only one consideration in determining what is in the best interest of the child. However, if all other considerations are equal then the preference of the child will often times be the tipping point.
How to Contest a Will
January 8, 2008 | Leave a Comment
I ran across a great post from fellow Mississippi lawyer and blogger Ronald Morton.
Here is an excerpt from his post on discussing how to contest a will in Mississippi.
“The following are the situations in which a will may be contested:
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- Mental incapacity. You may contest a will if you believe your loved one did not have the mental capacity to write the will. The best way to prove this is with a statement from a doctor who examined your loved one around the time he or she wrote the will. You may also use medical records and other witnesses who were around your loved one at the time.
- Undue Influence. If you believe another person exerted undue influence over your loved one and induced your loved one to change the distribution under his or her will, you may contest the will based on undue influence. Generally, the person contesting the will is required to prove the person exerted undue influence. However, if the person had a fiduciary relationship with your loved one, that person may have to prove that there was no undue influence. People who might have a fiduciary relationship include a child, a spouse, or someone with a power of attorney.
Click HERE to continue reading Ronald’s post on this topic.
Living Trusts vs. Wills - Part 5 (final)
December 17, 2007 | 1 Comment
It seems that a lot of you have enjoyed the series on living trusts vs. wills from viewing the amount of traffic that these posts have seen. I hope that all of my subscribers will enjoy the final post in this series. Soon I’ll have the entire list up on the resources page so that you can have everything in one place and be able to go there and download the full list in word format if you’d like.
I want to add that this list isn’t a conclusive list but just some things that you should keep in mind when doing your estate planning. As an estate planning lawyer I highly believe that living trusts are among the most efficient and best estate planning instruments available. However, they are right for everyone. When making important estate planning decisions that will effect your family for decades make sure to talk to your lawyer.
Okay, with that out of the way. Here is the conclusion to the list.
Living Trusts vs. Wills - Part 5 (final)
19. Is a living trust expensive?
Not when compared to all the costs of court interference at incapacity and death. How much you pay will depend on how complicated your plan is.
20. How long does it take to get a living trust?
It should only take a few weeks to prepare the legal documents after you make the basic decisions.
21. Should I have an attorney do my trust?
Yes, but you need the right attorney. A local attorney who has considerable experience in living trusts will be able to give you valuable guidance and peace of mind that your trust is prepared properly. In some states, qualified paralegals can now also prepare trust documents; however, they cannot give you legal advice.
22. If I have a living trust, do I still need a will?
Yes, you need a “pour-over” will that acts as a safety net if you forget to transfer an asset to your trust. When you die, the will “catches” the forgotten asset and sends it into your trust. The asset may have to go through probate first, but it can then be distributed as part of your living trust plan.
23. Is a “living will” the same as a living trust?
No. A living trust is for financial affairs. A living will is for medical affairs; it lets others know how you feel about life support in terminal situations.
24. Are living trusts new?
No, they’ve been used successfully for hundreds of years.
25. Who should have a living trust?
Age, marital status and wealth don’t really matter. If you own titled assets and want your loved ones (spouse, children or parents) to avoid court interference at your death or incapacity, consider a living trust. You may also want to encourage other family members to have one so you won’t have to deal with the courts at their incapacity or death.
26. Summary of Living Trust Benefits
- Avoids probate at death, including multiple probates if you own property in other states
- Prevents court control of assets at incapacity
- Brings all your assets together under one plan
- Provides maximum privacy
- Quicker distribution of assets to beneficiaries
- Assets can remain in trust until you want beneficiaries to inherit
- Can reduce or eliminate estate taxes
- Inexpensive, easy to set up and maintain
- Can be changed or cancelled at any time
- Difficult to contest
- Prevents court control of minors’ inheritances
- Can protect dependents with special needs
- Prevents unintentional disinheriting and other problems of joint ownership
- Professional management with corporate trustee
- Peace of mind
ABA Releases it’s Free Estate Planning Guide
December 11, 2007 | Leave a Comment
What should everyone in Memphis and Mississippi look at before going to their estate planning lawyer? The new ABA Estate Planning Guide. It’s a great source of information for all of your questions about wills, trusts, power of attorneys and probate both for here in Memphis, Tennessee and Mississippi.
I’ve included a link to each chapter that you can click on to download and view.
Ch. 1: Getting Started
Ch. 2: Transferring Property without a Will
Ch. 3: Making a Will
Ch. 4: Trusts
Ch. 5: Living Trusts
Ch. 6: Common Estate Planning Situations
Ch. 7: Special Considerations
Ch. 8: Death and Taxes
Ch. 9: Changing Your Mind: Changing, Adding to, or Revoking Your Will or Trust
Ch. 10: Choosing the Executor or Trustee
Ch. 11: Planning Now to Make Things Easier for Your Family
Ch. 12: When You Can’t Make the Decision: Living Wills, Powers of Attorney, and Other Disability Issues
I’d like to give thanks to Attorney David Goldman over at floridaestateplanninglawyerblog.com for bringing this to my attention.
Living Trusts vs. Wills, Part 4
December 7, 2007 | Leave a Comment
Continuing the Living Trusts Frequently Asked Questions theme.
13. If something happens to me, who has control?
If you and your spouse are co-trustees, either can act and have instant control if one becomes incapacitated or dies. If something happens to both of you, or if you are the only trustee, the successor trustee you personally selected will step in. If a corporate trustee is already your trustee or co-trustee, they will continue to manage your trust for you.
14. What does a successor trustee do?
If you become incapacitated, your successor trustee looks after your care and manages your financial affairs for as long as needed, using your assets to pay your expenses. If you recover, you automatically resume control. When you die, your successor trustee pays your debts and distributes your assets. All this is done quickly and privately, according to instructions in your trust, without court interference.
15. Who can be successor trustees?
Successor trustees can be individuals (adult children, other relatives, or trusted friends) and/or a corporate trustee. If you choose an individual, you should name more than one in case your first choice is unable to act.
16. Does my trust end when I die?
Unlike a will, a trust doesn’t have to die with you. Assets can stay in your trust, managed by the person or corporate trustee you selected, until your beneficiaries reach the age(s) you want them to inherit. Your trust can continue longer to provide for a loved one with special needs, or to protect the assets from beneficiaries’ creditors, ex-spouses and future death taxes.
17. How can a living trust save on estate taxes?
If you die in 2007 or 2008 and the net value of your estate (assets minus debts) is more than $2 million, federal estate taxes must be paid on the excess at a rate of 45%. If you are married, your living trust can include a provision that will let you and your spouse leave up to $4 million estate tax-free to your loved ones, saving up to $900,000 in taxes.
18. Doesn’t a trust in a will do the same thing?
Not quite. A will can contain wording to create a testamentary trust to save estate taxes, care for minors, etc. But, because it’s part of your will, this trust cannot go into effect until after you die and the will is probated. So it does not avoid probate and provides no protection at incapacity.
Living Trusts vs. Wills, Part 3
December 5, 2007 | Leave a Comment
As Memphis and Mississippi estate planning lawyers we’re always here to help you. I’m continuing with the Living Trusts vs. Wills series. In this section I’ll be looking a little more in depth at living trusts.
7. What is a living trust?
A living trust is a legal document that, just like a will, contains your instructions for what you want to happen to your assets when you die. But, unlike a will, a living trust avoids probate at death, can control all of your assets, and prevents the court from controlling your assets if you become incapacitated.
8. How does a living trust avoid probate and prevent court control of assets at incapacity?
When you set up a living trust, you transfer assets from your name to the name of your trust, which you control — such as from “Bob and Sue Smith, husband and wife” to “Bob and Sue Smith, trustees under trust dated (date of trust).”
Legally you no longer own anything (don’t panic: everything now belongs to your trust), so there is nothing for the courts to control when you die or become incapacitated. The concept is very simple, but this is what keeps you and your family out of the courts.
9. Do I lose control of the assets in my trust?
Absolutely not. You keep full control. As trustee of your trust, you can do anything you could do before — buy/sell assets, change or even cancel your trust (that’s why it’s called a revocable living trust). You even file the same tax returns. Nothing changes but the names on the titles.
10. Is it hard to transfer assets into my trust?
No, and your attorney, trust officer, financial adviser and insurance agent can help. You need to change titles on real estate (in- and out-of-state) and other titled assets (stocks, CDs, bank accounts, other investments, insurance, etc.). Most living trusts also include jewelry, clothes, art, furniture, and other assets that do not have titles.
Also, beneficiary designations on some assets (like insurance) should be changed to your trust so the court can’t control them if a beneficiary is incapacitated or no longer living when you die. (IRA, 401(k), etc. can be exceptions.)
11. Doesn’t this take a lot of time?
It will take some time — but you can do it now, or you can pay the courts and attorneys to do it for you later. One of the benefits of a living trust is that all your assets are brought together under one plan. Don’t delay “funding” your trust. It can only protect assets that have been transferred into it.
12. Should I consider a corporate trustee?
You may decide to be the trustee of your trust. However, some people select a corporate trustee (bank or trust company) to act as trustee or co-trustee now, especially if they don’t have the time, ability or desire to manage their trusts, or if one or both spouses are ill. Corporate trustees are experienced investment managers, they are objective and reliable, and their fees are usually very reasonable
Can I use a do-it-yourself will kit or trust kit?
November 26, 2007 | Leave a Comment
I get this question all the time by potential estate planning clients calling both my Germantown and Olive Branch offices. Here is the short answer, yes but beware. (As a side note I had a friend once who told me that he’s never heard a lawyer simply say yes before. I told him that’s because in law school virtually every exam answer starts with either “yes, but” or “no, but”. Unfortunately there is almost no straight answer for anything when it comes to legal issues.)
A well-tailored estate plan ordinarily has many more elements than can be successfully addressed in a do-it-yourself estate planning kit, will kit or trust kit. While a do-it-yourself will or trust should be valid in both Tennessee and Mississippi if it is propertly executed and witnessed, the likelihood of ending up with a proper will or trust is about the same as if you attempted to fly and land a 747 by just reading the flight manual. Heck, you might get away with it, but the affects if you don’t are catastrophic. There is simply no substitute for the experience of a professional estate planning lawyer.
One probelm with the use of these cheap (and I truly mean “cheap” here, with all the bad connotations that come with that word) estate planning kits is that people simply fill in the blanks and think that what they have done constitutes an estate plan. What many people don’t understand is that a poprer estate plan or trust must actually be funded. An estate plan is not complete simply because a piece of paper was signed. Assets must be transfered properly or else the plan is worthless. Also, all types of assets that the person owns or controls that pass to beneficiaries independently of a will, such as retirement plans and life insurance, must be considered. The beneficiary designation forms for these assets will not be found in a kit.
In my years of experience I’ve found that people who believe that they need a “simple” estate plan are often surprised to find that they have failed to consider critical points, such as the possibility of simultaneous deaths and the significant benefits that trusts offer.
A do-it-yourself kit may pass muster from a basic legal standpoint if executed properly, but its success should not be measured by whether the resulting documents are legal, but by whether one’s objectives are accomplished.
Living Trusts vs. Wills, Part 2
November 20, 2007 | Leave a Comment
I’m continuing the series on Living Trusts versus Wills that I started last week. These are more questions that our Memphis area law firm estate planning lawyers answere frequently for our estate planning clients.
I’d love to hear your specific questions or comments that about Mississippi Law or Tennessee Law. If there is a particular topic that you would like to see covered please contact us and we’d be happy to address it.
4. Is it true that joint ownership with rights of survivorship avoids probate?
Not always. Joint ownership can just postpones probate. With most jointly owned assets, when one owner dies, full ownership does transfer to the surviving owner without probate. But if that owner dies without adding a new joint owner, or if both owners die at the same time, the asset must be probated before it can go to the heirs.
Be on the lookout for other problems though. For example, when you add a co-owner, you lose some control. Your chances of being named in a lawsuit and of losing the asset to a creditor are dramatically increased, even if you have done nothing yourself. There could be gift and/or income tax problems. And since a will does not control most jointly owned assets, you could end up accidentally disinheriting your family.
With some assets, particularly real estate, all owners must sign legal documents to sell or refinance. So if a co-owner becomes incapacitated, you could find yourself with a new “co-owner” — the court–even if the incapacitated owner is your spouse.
5. Why would the court get involved if someone is incapacitated?
If you can’t conduct normal business due to some type of mental or physical incapacity (Alzheimer’s, stroke, heart attack, etc.), only someone appointed by the court can sign for you - even if you have a will. (Remember, a will only becomes effective after you die.)
The court can be like a dreaded disease. Once it gets involved, it usually stays involved until you either recover or die. The court and it’s appointee, not your family, controls how your assets are used to care for you. This public process can be expensive, embarrassing, time consuming and difficult to end if you recover. Worse yet this process does not replace probate at death - by just having a will (or worse nothing at all) your family could have to go through the court system twice!
6. Does a durable power of attorney prevent the court’s involvement if you become incapacitated?
A durable power of attorney is a document that appoints someone and gives them the authority to manage your financial affairs if you are unable to do so. A major probelm here in Memphis and in Mississippi however that we lawyers come across is that many financial institutions will not honor one unless it is on their form. And, if accepted, it may work too well — giving someone a “blank check” to do whatever he/she wants with your assets. A durable power of attorney can be very effective when used with a living trust, but risky when used alone.
Will Contests Featured on Dr. Phil Show Today
November 13, 2007 | Leave a Comment
The November 13, 2007 episode of the Dr. Phil show will be all about will contests and estate planning blunders. For all of you out there who wonder if people really fight over wills this should be your chance get an earful.
The teaser for the show identified four sisters who were bitterly embattled in a will contest for the $400,000 inheritance left by an aunt. It seems that the aunt went away to stay with one of the sisters immediately before passing away, and during that time the original will was changed (this is a called a codicil to a will) in a way so that the sister and her kids received quite a large proportion of the estate.
This brings up an interesting question that each and every one of you should be thinking about when doing your estate planning here in Tennessee and Mississippi. Are you sure that your heirs will not be fighting over what you leave them in your will? Probably not.
This is another reason why almost everyone should seriously be considering having a Mississippi lawyer or Tennnessee Lawyer create a living trust for them. If a living trust had been in place for the Aunt all of the bickering, hurt feelings and very costly legal fees would have been avoided.
To find out more information about how the Ferrell Law Firm can help you with your Memphis living trust or Mississippi living trust give us a call today at 901-881-6352.
Living Trusts vs. Wills, Part 1
November 12, 2007 | Leave a Comment
Over the next few weeks I’m going to be blogging on the benefits of a Living Trust versus a Will. In my practice as an estate planning attorney in Mississippi and in my law firm in Tennessee I find that creating and using a living trust is often times the best avenue for protecting a family’s assets and making these as easy as possible for the family. This is true for all types of clients but especially true for clients with children.
Mississippi and Tennesse Estate Planning Series:
The Benefits of a Living Will
1. I already have a will. Why would I want to create a living trust?
Contrary to what you have probably always been told, a will may not be the best plan for you and your family - mainly because a will does not avoid probate when you die. For Tennessee residents A will must be verified by the Shelby County Probate Court, For Mississippi Residents a will must be verified by the DeSoto County Chancery Court before it can be enforced.
Also, because a will is only seen and triggers actions after you die, it provides no protection if you become physically or mentally incapacitated. So the court could easily take control of your assets, without your input of what to do, before you die - a concern for millions of older Americans and their families.
Fortunately, there is an extremely simple and proven alternative to a will–the Revocable Living Trust. It avoids the process of probate, and lets you keep complete control of your assets while you are living - even if you become incapacitated - and after you die.
2. What is probate?
Probate is the legal process through which the court fees that, when you die, your debts are paid and your assets are distributed according to your will. If you don’t have a valid will, your assets are distributed according to Tennessee or Mississippi law of intestacy. For a more detailed look at what probate is look at the probate section of the Resources and FAQ page.
3. What’s so bad about probate?
It can be expensive. Legal and executor fees and other costs must be paid before your assets can be fully distributed to your heirs. If you own property in other states, your family could face multiple probates, each one according to the laws in that state. Because these costs can vary widely, be sure to get an estimate.
It takes time, usually anywhere from nine months to two years, but in many instances it can take much longer. During part of this time, assets are usually frozen so an accurate inventory can be taken. Nothing can be distributed or sold without court and/or executor approval. If your family needs money to live on, they must go to the Chancery Court or Probate Court to formally request a living allowance, which may be denied.
Your family has no privacy. Probate is a public process, so any “interested party” can see what you owned and who you owed. The process “invites” disgruntled heirs to contest your will and can expose your family to unscrupulous solicitors.
My next post will look more in depth into the probate of the will. This will lead into a look at how a living trust can be beneficial to people looking to avoid the high cost and long length of time associated with the probate process.
If you would like to gather more information about Living Trusts in Tennessee or Mississippi please call the Ferrell Law Firm at 901-881-6352 today!
