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Exercising Control Comes With a Price

By December 5, 2012Estate Planning

I’d like to take a moment and share an experience I had recently while meeting with a mother and her son. The mother has always had a last will and never wanted to have a living trust. Despite all the explanation of how beneficial an MH Estate Plan would be for her and her family, she still chose to not have one. So, we assisted her with the creation of a new last will. We also helped her to complete additional paperwork that would transfer assets to her beneficiaries upon her passing without having to go through the arduous probate process. For some of our clients, this is what they feel best with and we respect their wishes.

An inherent problem with a last will, or other non-probate transfers such as listing beneficiaries on bank accounts, life insurance policies, etc., is that the funds will transfer outright to the beneficiary. You might ask, “What could possibly be wrong with going outright? I want them to receive the money, so shouldn’t they receive it outright?” Well, while you may want them to receive the funds, you may not like when they receive the funds.  Perhaps you have a situation where a beneficiary would benefit from a more controlled distribution.

Let’s go back to my client now. She wanted her three children to receive equal shares of her property and to receive it without going through probate. She listed beneficiaries and structured her estate the best she could. However, over the last few months she decided that one of the sons was no longer capable of maintaining some of his inheritable property.  Because of this, she desired to exercise control in her last will over how, when, and what he was to receive.

The part about this that surprised my client is that exercising this type of control generally comes with a price – the estate would have to go through probate. I won’t get into all the specifics of the situation, but she was not pleased to find out that if she wanted control, then there would be a steep price to pay for it – not only in money, but time and grief and publicity. The only way around her situation to exercise control and to avoid probate was to create a trust, and she ultimately decided to do so after we carefully explained all the alternatives and ramifications.

A trust can be a powerful document. The mother told us that she thought she wasn’t “wealthy” enough to need a trust and for that reason she only had a last will. But a trust does so much more than help the “wealthy.” In fact, wealth is only one of several factors we look at when explaining to a client the reasons why or why not to create a trust. Control is one of the main factors to consider and if you have beneficiaries that will need care, assistance, time, and/or oversight, then a trust might be the right tool for you. Typically, a last will just doesn’t cut it.

Please come in and talk to us about your situation and how you would like your estate to be managed, administered, and ultimately disbursed. You might just be surprised at how much an MH trust can do for you and your beneficiaries. Schedule a free consultation by calling 888.222.1328 today!


MH_ipad_splashAbout Morris Hall:
At Morris Hall, we have focused our legal practice on estate planning for over 40 years.  Along with estate planning, our attorneys help clients and their families with matters of probate, trust administration, wills, power of attorneys, business planning, succession planning, legacy planning, charitable gifting and other important legal aspects.  We also have divisions in financial, real estate and accounting to help you incorporate all of your planning together, ensuring that everything works perfectly for your needs and situation. Our Arizona offices are located in Phoenix, Mesa, Scottsdale, Cave Creek, Tucson, Prescott, Flagstaff and Arrowhead.  Our New Mexico offices are located in Albuquerque, Las Cruces and Santa Fe.  Contact us today at 888.222.1328 to schedule an appointment!

This blog should be used for informational purposes only.  It does not create an attorney-client relationship with any reader and should not be construed as legal advice.  If you need legal advice, please contact an attorney in your community who can assess the specifics of your situation.


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