Trusts & Estates

Robert Pearson Law provides counseling and litigation services in the context of trusts and estates. We can help you leave your assets to the people you want and in accordance with your overall wishes; create a smoother and perhaps cheaper process for your loved ones when you pass; protect your assets from creditors while you’re living; plan for management of care and finances if you become mentally incapacitated and unable to make those decisions while you’re living; and resolve disputes when they arise, both in and out of court.

As part of our estate planning practice, we help create and modify estate plans. In doing that, we’ll sit down with you to learn about you and your property, any relevant family dynamics, and how you wish to distribute your property when you’re gone. We’ll also discuss things that affect you today–like how you want decisions about your care and finances to be  made if you become mentally incapacitated while you’re still alive. We’ll identify your existing assets and ensure that the beneficiary designations are correct, like on bank accounts, brokerage accounts, retirement accounts, and life insurance policies. We draft and counsel on all sorts of estate-planning documents, including wills, trusts, living wills, financial and medical powers of attorney, and beneficiary deeds for real estate.

Trusts involve a fiduciary relationship where one party holds property for the benefit of another. The trustee receives legal title to property from the settlor and holds it for the benefit of the beneficiary for the duration of the trust, with the beneficiary holding what’s called equitable title. The trustee has duties, and the beneficiary can enforce them. To create a valid trust, several elements must be met, including (i) an intent to create a fiduciary relationship, (ii) property (and delivery of that property); (iii) a beneficiary; (iv) a trustee; (v) a valid trust purpose; and (vi) compliance with legal formalities.

Trusts are flexible estate planning tools and are used for various reasons. They can be used, for example, as a will substitute to avoid probate; to plan for incapacity while living; or to give property successively two or more beneficiaries; or for asset management.

A spouse, for example, upon passing might wish to provide financial support for their surviving spouse while that spouse is alive, but then to transfer all their assets to their children upon that spouse’s passing. A trust could accomplish that. Or, a high-net-worth individual may, for example, not wish to be bothered with the management of significant assets. A trust could help. A trust can also be used to avoid guardianships for minors if you become incapacitated; and to minimize taxes. They’re truly flexible.

The nature of the beneficiary’s interest is flexible too. Trusts can be mandatory, like a right to income trust, annuity trust, or unitrust, which set mandatory distributions; or they can be discretionary, which allow the trustee more flexibility.

• An income trust, for example, typically entitles the beneficiary to receive the income from the trust at least annually, but more frequent distributions can be directed, while preserving the principal for a separate beneficiary.

• An annuity trust typically entitles a beneficiary to receive a fixed amount every year, and it doesn’t matter whether that money comes from income or principal. A unitrust is like an annuity trust but uses a different calculation.

• Under a typical unitrust arrangement, a trustor might state that person X will get 5% of the trust principal valued at the end of each year; so, if the principal is $500,000 at the end of the first year, then in year-two, person X would be entitled to $25,000.

• Discretionary and support trusts authorize the trustee to pay the beneficiary at the trustee’s discretion for the “comfortable support of the beneficiary.” These trusts allow a trustee to be more fluid and adjust to changed circumstances, including in financial markets and the day-to-day life of the beneficiary.

• Asset protection trusts are a way to shield assets from creditors. A trustor creates a trust over their assets, naming a separate but friendly trustee. The terms of the trust then allow for the friendly trustee to make discretionary distributions to the trustor; and creditors cannot reach the property while in trust.

• Special needs trusts (SNT) can be used for folks with special needs to maintain their access to government benefits. Many of us have family members with special needs who use government benefits. If that person receives a gift or inheritance, those new assets would likely be considered as an asset in determining their eligibility for government benefits. If they have too many assets, they’d lose their eligibility. A special needs trust can allow them to stay eligible.

• Spendthrift provisions can be included in trusts to protect the beneficiary from themselves by consuming all the assets right away, meaning, for example,  that a beneficiary cannot sell their interest in the trust for a lump sum or consume all trust assets right away. Spendthrift provisions also can be used as a way to shield assets held in trust from a beneficiary’s creditors.

We help individuals, families, and businesses with their trust needs.

If you’ve been named trustee of a trust, you have certain obligations. We help trustees administer trusts. We also assist beneficiaries in knowing their rights under trusts, including seeking information about trust assets (an accounting) and removing trustees.

Disputes over trusts, estates, and probates are common. We might, for example, represent a trust beneficiary who has become upset and suspicious after a trustee won’t respond to reasonable requests for an accounting of trust assets, or has refused to make mandatory distributions. Or, in a probate proceeding, an heir or beneficiary may challenge a transfer of real property made by the decedent just before death where substantial evidence exists that the decedent was mentally unable to appreciate her actions at the time of the transfer, or was otherwise under undue influence. A decedent may have left multiple wills, with entirely different distribution directions, and the court must decide whether the wills are valid, and if so, which governs.  Many times, cases can and should be resolved early to save costs and manage risk. In those instances, we can help negotiate and facilitate early, binding resolutions, avoiding protracted, costly litigation. .

But some disputes need to be litigated. Litigation means resolving disputes through the court process. We handle trust, estate, and probate litigation from start to finish. Ideally, clients involve us early–right when a dispute arises–so we can help navigate issues and manage risk, through performing an early case-evaluation, generating an objective analysis of the parties’ positions and their strengths and weaknesses. We provide straightforward, no-nonsense advice about the factual and legal realities of the case, so that you can be fully informed and clear-eyed when making important decisions about resolving your dispute. Typically, cases requiring court intervention are either resolved early through mediation or a conciliatory process; by months of litigation resulting in an eventual pre-trial settlement; or by resolving it through trying it to an arbitrator, judge, or jury.

Providing professional, thoughtful, diligent litigation services–from start to finish in your trusts and estates disputes–we’re with you.