Some reasons why clients wants their home to stay in their trust after their death
Attorney Tom Olsen: Holley, before the show we were talking about living trusts and you were talking about your client this morning and why they needed a living trust. It was a lady, right?
Attorney Holley Knapik: Yes.
Tom: A single lady, I assume, right?
Holley: Single lady.
Tom: We decided, you decided that a living trust was going to be the best tool for her because.
Holley: Because of plan of distribution in reference to her home, and that she wants the home maintained and kept for the benefit of not only her children, but her grandchildren, and to make sure that there's the ability for the grandchildren to live there should they wish to. If not that there needs to be an agreement in regards to if the home is sold, what happens, or if it's rented.
Having that NA trust ensures that the successor trustees are working within their power to ensure that the home is not sold from under the grandkids if they wish to stay there or one of the other kids, et cetera. We consider that a little more complex and-
Tom: Complex plan distribution.
Holley: Complex plan distribution. Will doesn't suffice.
Tom: Holley, most people when they pass away, they just flat out just leave their home to their adult children. Easy breezy. Here's a situation where she's got, wants to take care of some grandkids, not just them owning it, but the ability to live there. A lot of plan distribution has a lot of ifs, ands, and buts.
Holley: That is exactly the phrase I used during the consult. We had a lot of if-then statements running around. [laughs]
Tom: That is where a lot of years of experience will help you to draft that. I've asked you to let me review that when you've got it, and I'll be happy to put my 2 cents worth in. That reminds me about another client that I had a few weeks ago, Holley, I'm sorry. She came to me, Mom came to me, and she happened to have daughter in the consult with her.
That's always a little bit of a warning sign. I'll let the daughter, or I'll let the child say in that consult to a certain point in time, I'll say, "Look, you child," in this case, daughter, "You've got to go sit outside while I talk to Mom."
I didn't do that in this situation, but here's why it's interesting, I think. Mom wanted to just rather than give her home to daughter and son when she passed away, she wanted son to have a right to live there for a couple of years. First, before it got sold, and they split the proceeds. Mom started off by saying, "Look, I'm just going to leave it to my daughter and she will make sure that he can live there for a couple of years, and then she will sell it and split the proceeds." I said, "That's fine. If you want to go on a trust, you can do that. Hopefully, she'll do that for you, but if you want to make sure written in stone that that's going to happen, you need a living trust."
Daughter, pipes up, "Mom, don't worry about it. Just leave it to me. I'll take care of my brother. You don't need to be worried about it." Client looks at me, I go, "It's all great and wonderful, but if you want to make sure that that happens, we need to put it in black and white in a living trust." Daughter once again, "Mom, don't worry about it. I'll take care of it. No worries." Mom finally says, "Okay. All right, I'll leave it flat out to my daughter. I'll trust her to take care of it. Well, sure enough." A week later, client is calling her office. "I want to make sure that my son has a right to live there when I pass away." We keep telling, "You want to do that? You got to do a living trust. This issue has not been resolved yet."
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