Trustee Surcharges

I often represent trustees who have gotten into a conflict with one or more beneficiaries of a trust after a loved one dies.  I see this, for example, when the second parent of a couple dies, and the couple's assets are to be distributed to their children.  The couple names one of the children as the trustee, and her siblings may question how she is carrying out her duties as trustee. If a trustee has in fact done something wrong, the Probate Court could order a "surcharge" against her--this basically means that she has to pay some money to the trust to make up for her mistake. When I negotiate such issues, I sometimes find that the parties get confused [...]

By |2018-08-10T14:19:23-07:00July 23rd, 2015|Uncategorized|

Do You Need a Bypass Trust (Revisited)?

In my last post, I talked about why most people probably don't need a bypass trust in their estate plans anymore.  This is because most peoples' estates are below the threshold for paying any estate tax--in 2015, $ 5,430,000 for an individual and $ 10,860,000 for a couple. However, people may still want to establish some sort of a bypass trust in order to control who gets their assets when the second spouse dies.  While both spouses are alive, they can agree on who gets their property when the second of them passes away.  When the first spouse dies, his property goes into the bypass trust for the lifetime benefit of the second spouse.  At that point, the bypass trust [...]

By |2018-08-10T14:19:23-07:00July 20th, 2015|Uncategorized|

Do You Need A Bypass Trust ?

I have seen a number of clients in the last twelve months who have provisions for a "bypass trust" in their current estate plans.  In the usual scenario for plans in the past, a bypass trust is created and funded when the first spouse of a couple dies.  Some (perhaps all) of that spouse's property is put into the bypass trust for the benefit of the surviving spouse.  When the surviving spouse dies, that property is distributed to the final beneficiaries (often the couple's children). Estate planners drafted for bypass trusts in the past because it was a way of reducing estate taxes.  If someone died in the year 2000, for example, an estate worth over                $ 675,000 would be taxable.  [...]

By |2018-08-10T14:19:23-07:00July 13th, 2015|Uncategorized|