Paul O. Dillon, Attorney at Law

Should You Have a Revocable Trust?

There are many good reasons to include a revocable trust as part of your estate plan, according to a recent article from Columbus Monthly, “Planning Ahead: When to Consider a Revocable Trust.” You might think trusts are only for the wealthy. However, that’s not true. An experienced estate planning attorney can easily establish a trust to protect assets and direct their distribution. Distribution can occur while you’re living or after you’ve passed away.

Trusts also distribute assets to beneficiaries outside of probate, which avoids the delays and costs associated with probate and, even better, keeps your private business confidential between you and your beneficiaries. When a will is probated, many courts require an inventory of assets. The will becomes part of the public record, and anyone—including ex-spouses, local realtors, thieves and angry relatives—can read your will and learn about your bequests.

A tip from the professionals: ensure an estate planning professional establishes your trust. Every state’s laws are different and what your brother-in-law in Idaho did might not work in Virginia.  You should also ensure that the trust is properly funded. If you don’t fund the trust, it won’t work as you intended.

Revocable trusts are used to pass assets after you’ve died. The language of the trust is tailored to your specific wishes. For instance, you may want your children to inherit a certain amount of money every year or only when they have reached goals, such as completing college.

Trusts can be created to fund education, serve as a deposit for a home, or initiate distributions upon reaching a specific age. This is especially beneficial for parents of young adults, who understand that giving a twenty-five-year-old their entire inheritance all at once may not be as beneficial as making partial distributions over a twenty-year period.

One example of a well-structured trust is a woman who owns land that has been in her family since 1947. There are two houses on the property. The land has been placed in a trust to manage the property, and the trust language stipulates that multiple generations can continue to reside there until there are no family members who wish to live on the property. At that point, the trust allows the trustee to sell the property and distribute the proceeds to the living beneficiaries.

Trusts are also useful when a person becomes incapacitated and needs someone else to access the assets owned by the trust to manage the person’s financial affairs. A home, bank account, or all a person’s assets can be placed in a trust, and then the trustee can manage the person's affairs without needing to go to court and file for guardianship.

Whether or not you need a trust should be discussed with an experienced estate planning attorney. It has applications for protecting heirs in the event of a second marriage, incapacity and controlling assets. Your attorney will determine the type of trust that best suits your unique situation.

Reference: Columbus Monthly (March 10, 2025) “Planning Ahead: When to Consider a Revocable Trust”

How Do You Pick an Executor?

Most people consider a spouse, an adult child, or a sibling the executor. If there’s no spouse or no children, usually another family member, like a nephew, niece, or responsible child of a close friend, is a good alternative. Who you name to be your executor is an important decision and one to be made with care, according to the article “The right executor is key to honoring your wishes” from Cleveland Jewish News.

The executor needs to be trustworthy, understand financial matters and have the time to take on the many tasks of this role. Rarely is there a perfect candidate. However, someone with the skills and can be trusted to fulfill the decedent’s wishes is the right pick.

It’s not unusual for a family member to not be fit for an executor's responsibilities. No matter how much you love your spouse, if they can’t manage financial matters or have a history of making poor financial decisions, you may want to name someone else to serve as your executor.

Figuring out who can be the executor as far in advance as possible is as important as having an estate plan. Here’s a list of some of the duties of the executor:

• Gathering death certificates, usually from the funeral home, to notify various entities.
• Submitting the Last Will and Testament to the probate court for review.
• Notifying the Social Security Administration.
• Notifying your state’s Department of Motor Vehicles
• Establishing an estate account and applying for a tax ID number.
• Notifying financial institutions, financial advisors, CPAs, employers and health insurance companies.
• Gathering and managing all financial assets while the estate is being settled.
• If the decedent owned a home, ensure that the house is secured and maintained while the estate is settled.
• Contacting beneficiaries and coordinating with trustees if there are trusts.
• Paying estate taxes and personal taxes.
• Managing digital assets.
• Distributing the assets to heirs.

When the executor does their job, most of the time, it all goes smoothly. However, if the executor ignores the decedent's wishes, the court can remove the executor. Someone who makes perfect sense as an executor on paper may not always be the best candidate for the job.

If you don’t have a will, the court will appoint someone to manage your estate and follow state law to determine who will receive your money and assets.

Everyone must have a last will and a comprehensive estate plan, whether they have a modest home or a mansion. Having someone who will carry out your wishes is the only way to be sure that the wishes expressed in your estate plan will be carried out.

Reference: Cleveland Jewish News (Feb. 3, 2025) “The right executor is key to honoring your wishes”

An Estate Plan To-Do List to Get Planning Done

Even if your New Year’s resolutions have fallen by the wayside, don’t let the resolution to create or revise your estate plan pass without tackling it. A recent San Francisco Bay Times article, “Kickstart 2025 With 5 Estate Planning Resolutions to Secure Your Future,” offers a step-by-step list of the tasks to complete your estate plan.

Start by locating your estate planning documents. Review them to be sure they’re up to date. If your will includes people no longer living or beneficiaries you’re no longer feeling generous towards, you’ll need to make those changes.

Review your estate plan with an eye on the people you’ve named for specific roles. Will the executor or trustee be a good fit? What about the person you’ve named as Power of Attorney? Your estate plan should also include a Healthcare Proxy. As you age, you need to be sure the people in these roles can still physically get to the bank or the hospital and navigate online banking or healthcare portals on your behalf.

Digital assets are now part of everyone’s life. However, not everyone addresses their digital assets in estate plans. You’ll need to review and record your digital accounts, from emails to social media to cryptocurrency, and create a list of the accounts, login information and passwords. If you have two or three-factor identification, you’ll need to be sure your digital executor can access your mobile phone or email to confirm their identity. Many people use password managers to gather their information. However, a notebook will do as long as your digital executor knows its location.

If you haven’t reviewed your healthcare directives in a while, you’ll want to do so. Your wish to be kept off any life-support systems while in your thirties may have changed as you have gotten older. After COVID, many people who would have never wanted to be on a respirator learned that it was lifesaving, not life-ending. Speak with your healthcare proxy about your wishes, so they know what you want and your estate planning attorney to ensure that they are documented properly.

An experienced estate planning attorney can help you avoid or minimize the probate process. For instance, placing assets in a trust can take the asset out of your taxable estate if the right trust is used. The assets in the trust won’t go through probate and will remain private. If using Payable on Death accounts makes sense for your estate plan, be sure that the accounts you want to transfer to someone else on your death are titled correctly.

An estate planning attorney will guide you through the process to ensure that you have the right documents, so your loved ones can help you if you become incapacitated and know your wishes when you die. It’s a gift to those you love, easing their burden and building your legacy.

Reference: San Francisco Bay Times (Feb. 5, 2025) “Kickstart 2025 With 5 Estate Planning Resolutions to Secure Your Future”

Why Cryptocurrency Ownership Demands Estate Planning

A cryptocurrency investor who died in an accident at age 33 had allegedly accumulated about $60 million in Bitcoin, Ethereum, RP, and Cardano. We’ll still never know if this was true because his crypto millions died with him. His estate plan did everything but address his digital assets, reports the article “Estate Planning With Cryptocurrencies” from Think Advisor.

No one knew how to access his cryptocurrency; he left no information about his digital passkeys and lost whatever he may have owned.

As this relatively new asset class continues to grow in value and use, it becomes increasingly important to have a plan to transfer assets to loved ones and protect the wealth from being lost. Many people who are invested in cryptocurrency tend to be younger and aren’t thinking about dying. However, as the example above illustrates, they need to think differently.

Accessing digital investments is impossible without the correct information. Cryptocurrencies are decentralized, so there’s no one to call when the owner dies. Another issue: as investors become wealthier, they are more likely to become targets of scanners who are aware of the vulnerabilities of this asset.

Executors, trustees and heirs must have the information about storage and private keys. Unless someone else knows about private keys and how to access them, the cryptocurrency may be lost forever if you are incapacitated or have died. The cryptocurrency may also be tangible or intangible property, depending upon whether it is stored on an external hard drive, in a digital wallet, or on a cryptocurrency exchange.

Knowing how to access a crypto wallet is critical. However, there’s more to know. Information should not be in a will, which becomes publicly available upon probate. Anyone who has access to the private key can withdraw funds.

A letter of instruction may be the best way to provide information and ensure privacy. For self-custodied wallets, using third parties for security and verification may be a better approach.

It might make more sense to hold cryptocurrencies in trust, making sure the trustees are familiar with digital investments and know how to manage and access the accounts.

As the cryptocurrency sector continues to grow, it becomes more critical to have an estate planning attorney prepare for digital and traditional assets. Smart decisions about how to hold cryptocurrencies will make the difference between a legacy of wealth and millions lost in cyberspace.

Reference: Financial Advisor (Jan. 6, 2025) “Estate Planning With Cryptocurrencies”

Preparing for Life With an Estate Plan

A properly prepared estate plan includes a number of legal documents giving your specific and personal instructions to healthcare providers, financial institutions and the courts in charge of validating your will and overseeing asset distribution after you die.

According to a recent article from Kiplinger, “5 Key Components of an Estate Plan—and 7 Others to Consider,” if you don’t have an estate plan, your state’s government and local courts will make many decisions for you. Worse, your loved ones will need to petition courts to do anything for you, from making healthcare and end-of-life decisions to appointing someone to raise your children or sell your home.

An estate plan is prepared by an estate planning attorney who will know the various legal documents and strategies necessary to protect you and your loved ones. An estate plan includes the following documents:

Living Will. This document expresses your wishes for medical care, with as much detail as you want. For instance, do you want to have artificial nutrition through feeding tubes or blood transfusions if you are unable to give your consent? How do you want doctors to manage end-of-life care, if your body is living but your brain functions have ceased?

Without a living will, doctors will usually take an aggressive stance to keep you alive, even if you have something else in mind. Alternatively, your loved ones might have to make these decisions without knowing what you would have wanted. Having a living will and making sure your loved ones know what you want is a gift to them. Think of the guilt they’ll live with if they don’t know your wishes.

Healthcare Power of Attorney. This POA names someone you trust to make medical decisions when you can’t convey your wishes because of incapacity. They become your healthcare proxy, speaking with your doctors and deciding on treatment for you. Without one, your loved ones won’t be able to be involved in your care without going to court and petitioning to be named healthcare proxy.

You may remember the case of Terry Schiavo, a 26-year-old woman who had a heart attack and was only kept alive through artificial means. Her husband and parents were engaged in a court battle from 1990 to 2005 when a court ruled doctors could remove a feeding tube. Most of these situations don’t make headlines but are no less painful for families.

Financial Power of Attorney. This POA names someone to manage your money, access financial accounts, manage assets and run the day-to-day finances of your life when you are incapacitated. If you don’t have a POA, the court will name someone for you, whether you would have chosen them or not.

There are different kinds of POAs. The Durable POA is in effect the moment it is executed. The Springing POA is only executed when you become incapacitated and may lead to delays. Your estate planning attorney will know which is best for your situation.

Last Will and Testament. A will outlines your instructions for distribution of assets. If you have minor children or other dependents, it names a guardian for them. It also names an executor, the person who will be in charge of managing your estate. Without a will, again, the courts will decide who should receive your assets and raise your children.

An estate plan addresses the use of trusts to distribute your assets without court involvement. If your family includes a disabled individual, your estate plan includes plans for their future. For singles and childless couples, an estate plan spells out who will be able to make financial and healthcare decisions when you cannot.

Consult with an estate planning attorney today to give yourself and your family the peace of mind you all deserve.

Reference: Kiplinger (Jan. 6, 2025) “5 Key Components of an Estate Plan—and 7 Others to Consider”

How to Choose a Successor Trustee?

Trusts are a popular estate planning tool, allowing for control and protection of assets and tailored to meet specific needs. A trust requires both a trustee or successor trustee, says a recent article from Kiplinger, “You’ve Got a Trust: Now Who Should Be the Successor Trustee?”

If you have an irrevocable trust, you might want to have two different people to serve as trustees. The investment trustee is in charge of managing the investments in the trust, while the administrator trustee manages the operations aspect of the trust. One person could perform both roles, but having two people may provide a second layer of oversight. Irrevocable trusts require the grantor to give up control of the assets in the trust, which may be more acceptable when two people are in charge of the trust.

Revocable or living trusts allow the grantor to be a trustee and have complete control over the trust. A successor trustee is named so someone can take over the trust if the grantor is incapacitated or dies.

The grantor may again choose to have two trustees. One can be the trustee in case of incapacity, and the second can be the trustee when the grantor dies. If you name an adult child as your executor and they are also the trustee of your revocable will, one person is responsible for everything. Dividing the roles could lighten the load for busy adult children. If a trustee lives far away, it may be challenging for them to act on your behalf during incapacity and you may wish someone more local to serve in this role.

Successor trustees have a number of duties. They have a fiduciary duty to identify and protect trust assets, pay bills, oversee finances, manage investments, manage the distribution of trust assets, file tax returns, make tax elections and manage any legal or financial issues relating to the trust. Depending upon the size of the trust, this could be a time-consuming responsibility.

Before automatically naming the eldest child to serve as successor trustee, take some time to think about whether or not they are the best person for the job. If the trust estate is passing to the children and the successor trustee’s role will be simple—dividing assets evenly among beneficiaries—this might be an easy decision.

Suppose there are more complex matters, like a distribution being held back because one of the beneficiaries is a minor or has a drug dependency issue, and distributions are at the discretion of the trustee. In that case, the trustee may face repercussions from family members.

Naming a successor trustee is like choosing someone to serve as your executor. They have to be honest, organized, good with financial matters, and able to communicate with heirs even when there’s little or a lot of resentment about their being in charge. They must also be available to interact with your professionals, including an estate planning attorney, financial advisor and accountant. There are instances when a bank, private fiduciary, or estate planning attorney may be a better choice for a successor trustee.

Your estate planning attorney can help you sift through the personalities and skill sets of possible trustees to determine the best candidate for the job.

Reference: Kiplinger (Dec. 18, 2024) “You’ve Got a Trust: Now Who Should Be the Successor Trustee?”

Wealth Protection Through Estate Planning

Without a well-prepared estate plan, wealth can be lost to taxes, administrative costs, or disputes among heirs, both in and out of court. With an up-to-date estate plan, changes to tax laws are proactively addressed and wealth can be protected and passed across generations. A recent article appearing in Medical Economics, “Estate planning is your first line of defense against wealth loss—Here’s what you should know,” explains how an estate plan creates a framework to minimize taxes, avoid the costs and complications of probate and ensures that your wishes for your estate are followed.

Documenting assets is one task that is done when creating an estate plan. When records are not clear, transferring assets can become complicated. A comprehensive record-keeping system can store documents like deeds, life insurance policies, asset inventories, family videos and photographs online.

Many financial records are already online through client portals by major financial companies. The key to incorporating these records into an estate plan is remembering where all the information is stored and being willing to share access information with a trusted family member or friend. The person you name as an executor of your will or a trustee for a trust is the most likely candidate to be provided with this information.

There are many steps to having a solid estate plan. However, there are also many missteps. Here are some of the most common pitfalls to avoid:

Failing to update an estate plan. All the documents in your estate plan, including a Will, Power of Attorney, Healthcare Proxy, HIPAA Release Form, Trusts, Advanced Directives and more, must be updated to comply with changing laws and changes in your life.

Making a careless decision about the executor or trustee can be disastrous. The eldest child does not have to be the one to be in charge of your estate. Neither does the person you love if their life is a trainwreck. The person to be named executor and/or trustee needs to be someone you know to be extremely responsible, reliable, good with money management and a solid moral compass.

Digital assets are often ignored when it comes to estate planning. However, this new asset class needs to be included. If you have email, you have a digital asset. You have digital assets if you have email, cryptocurrency, websites, social media content, online subscriptions and photos stored in the cloud. Suppose no plan is made to create an inventory of accounts and name a digital executor. In that case, your estate becomes vulnerable to identity theft, valuable cryptocurrency could be lost forever and there may be nothing your loved ones can do.

Most family fights have to do with unequal asset distribution after the death of a parent. A clear estate plan is one way to preclude confusion about what you want to happen after death. Talking about your estate plan while you’re still able to have these uncomfortable discussions is one way to help establish your wishes. You may want to create a Letter of Intent or make a video to express your reasons for making certain decisions. This may not be legally enforceable. However, it will serve to document your wishes.

Estate planning is not just about distributing assets after death. By establishing an estate plan, the family is better prepared to deal with the loss of a loved one and can focus on healing together instead of battling over their inheritance.

Reference: Medical Economics (Oct. 17, 2024) “Estate planning is your first line of defense against wealth loss—Here’s what you should know”

Here’s When You Need to Update Your Will

If you’ve got a will and an estate plan, you’re ahead of most people who are completely unprepared for the future. However, having a will is just the start, says a recent article from AARP.org, “6 Times When You Should Update Your Will.”

A will needs to be kept up to date. Changes need to be made when life-changing events occur to ensure that it still reflects your wishes. A skilled estate planning attorney should make these changes to ensure that the will is valid.

Changes to your marriage or family. Anytime you undergo a significant change, like welcoming a new child into the family or starting a divorce, you must make sure your will is updated. If you are in the middle of a divorce and you die, do you want your old will to give the spouse you were divorcing everything? There are also situations where people neglect to update their wills, and a first wife receives a surprise windfall while the current wife is left in the cold, financially speaking.

Changes in your heir’s situation. If an adult child develops a substance abuse problem, you may not want them to inherit a large sum of money all at once. You may create a trust and name a trustee, setting conditions on their ability to inherit. If an heir becomes disabled and applies for government benefits, you’ll want to create a Special Needs Trust not to make them ineligible for support and programs.

Relocating to a new state or even a new country. The Census Bureau reports that more than 1.2 seniors move across state lines every year, and many Boomers choose to live overseas. Wherever you go, you want to be sure your will is still valid. Estate laws vary from state to state, so the will you created when you lived in Illinois won’t necessarily be valid in Arizona. If you move to another country, you must have a will drafted to comply with local laws.

Your net worth increases or decreases significantly. Whether your net worth goes up or down, a change in your financial circumstances warrants a look at your will. If you inherited a big sum, you may want to add some philanthropy to your estate plan, or you may want to change how your estate is distributed. Any reallocations need to be documented properly.

You want to make a change. Life is full of changes. Someone you picked to be your executor five years ago may have died, and you haven’t decided who you want to replace them. You could also have a falling out with a family member and want to reduce their inheritance. Most importantly, don’t try to amend an existing will yourself. Speak with an estate planning attorney to ensure that your wishes are followed, and the changes are valid.

It’s been more than four years since you’ve reviewed your will. Estate plans are never one-and-done documents. Even if your life hasn’t changed, tax laws have. Your will needs to be revisited every three to five years to ensure that it works to accomplish your goals and protect loved ones.

Reference: AARP.org (Sept. 23, 2024) “6 Times When You Should Update Your Will”

Do I Need a Will?

Even after living through the global COVID pandemic, many people still don’t understand why they need a will and estate planning documents. One survey revealed as many as 40% thought they didn’t need an estate plan because they don’t have enough assets, says a recent article from Pittsburgh Post-Gazette, “Elder Law Guys: Having a will can bring peace, for you and your loved ones.” Even more worrisome, many of these people have minor children, who will be left unprotected if there is no will naming a guardian for them if their parents should die.

We’ve all read the stories of estate battles following the death of rich and famous people. Regardless of their age, marital status, or notoriety, their personal lives and finances became public headlines without a will and estate planning.

Regular people don’t want their loved ones to go through the mess of an estate battle, even if their personal news won’t become hot news on the internet. Here’s what to do to protect yourself and your family.

Make an inventory of your property. Include everything: your home, bank and investment accounts, personal possessions, retirement funds, life insurance, cars, boats and shares in a family business. Listing out who gets what in your will can avoid some (but not all) fights among relatives and siblings.

Even if you rent a home, if you’re employed and have a 401(k) and a bank account, you’ll want to be sure the people you care about inherit your property.

If yours is a blended family, or if you and your partner aren’t married, estate planning is even more critical. Estate planning is how you ensure that your biological children inherit your assets. If you’re not married, you need to take extra care, so you and your partner protect each other in case of a health emergency as well as for property distribution after death.

For parents of young children, a will is essential. Your will is the document used to name who you want to raise your children—a guardian. Without it, the court will decide, and it may not be the person you would have wanted. Your estate plan is also how you determine how children’s living costs will be paid. Your life insurance policy might belong in a trust, with a trustee named to oversee how funds are distributed to the guardians.

Your will is also used to name an executor, the person who will administer your estate, distribute assets, pay final taxes and estate taxes and ensure that your wishes are followed. An executor needs to be organized, responsible and trustworthy.

An estate plan should include documents to protect you while you are living. These include a Power of Attorney for financial and legal decisions in case of incapacity. A Healthcare Proxy or Medical Power of Attorney is needed so another person can be involved in your medical care, if you’re unable to speak for yourself. An experienced estate planning attorney will also discuss the need for a Living Will and other documents you might want to have.

The peace of mind resulting from having an estate plan in place can’t be measured. Knowing that you’ve protected your loved ones and yourself in life and after you’ve passed is a worthwhile investment.

Reference: Pittsburgh Post-Gazette (Sept. 22, 2024) “Elder Law Guys: Having a will can bring peace, for you and your loved ones”

Can I Bequeath the Family Home to My Children?

You may believe giving your home to your adult children is a generous move leading to happy memories. However, this isn’t always true. One story recounted in a recent article, “Inheriting a Home With Your Siblings? Here’s All That Can Go Wrong,” from Realtor.com, is an example of how badly this could go.

Three siblings were left their parent’s house when the second parent died. One sibling wanted to keep the house, while a second brother and a sister wanted to sell it and split the money. They had the property appraised, and the sibling who wanted the house bought out his sibling’s shares, paying them both a third of the house's current value. One brother blew his inheritance on a sports car, exotic vacations and an expensive nightlife. The sister bought a boat.

Fast-forward a few years, and real estate values skyrocketed. The brother who bought the house decided to sell it before moving away to be closer to his wife’s family. The house had tripled in value. His siblings now think he should share the profits he made, even though his siblings didn’t want the house. The rest of the family sides with the siblings, making matters harder for the brother.

Estate planning attorneys were asked for their opinions on the matter, and all agreed. He made the decision to buy the property when they didn’t want it, so he owned it free and clear. They aren’t entitled to share the profits. They certainly wouldn’t have shared the losses if the property value had gone down!

Other families fight about the contents of the house. This is why everyone needs an estate plan with a last will and testament clearly detailing how they want their estate, including personal possessions, to be distributed. Hoping the children “work things out” doesn’t end well for most families.

Some families like to have an estate sale company come in and sell the contents of the house and split the profits, while others flip a coin to see who gets what.

Another issue about personal possessions is items disappearing. Sometimes, aging parents decide to declutter without telling anyone. In other cases, a child or family member decides to take something without telling anyone.

How can you prevent your children from fighting over the house or its contents? Have a will made and discuss how to handle your unique situation with an estate planning attorney. Make sure the will includes clear directions as to whether or not the house should be sold or how the shares should be distributed. You could also add a provision stating that if one child buys the shares at fair market value, the transaction is final and the other siblings may not pursue any future gains after the sale.

Parents should never leave property to one child and expect the child to share the proceeds with any other siblings or family members. If property is left to one sibling, they have no legal requirement to share any portion of their inheritance. This happens more often than you’d think despite it being an easy situation to avoid.

As the example above illustrates, even buying out siblings’ shares can lead to problems. If the sibling buying out others' shares is also the executor or the trustee, the siblings and parents would be wise to meet with the estate planning attorney to clarify how this asset will be distributed and what their role will be. Executors who are also beneficiaries can find themselves at the centers of estate battles.

Families may think they don’t need to put things in writing. After all, they’re family. However, when it comes to inheritances, having everything in writing, property prepared by an experienced estate planning attorney and clearly understood by all, is the best you can do to prevent any estate battles among your loved ones.

Reference: Realtor.com (Sep. 14, 2024) “Inheriting a Home With Your Siblings? Here’s All That Can Go Wrong”