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Do you ever wonder what these very common trust provisions mean? Do you want to know how you can get trust distributions for these categories approved quickly and completely? If so, click here to listen to our exclusive 50-minute interview or read the 18 page transcript.

Do you dread doing a budget for your Trustee?

Are you frustrated that you even need to document your expenses?

You are not alone.

First of all, no one enjoys creating budgets except for perhaps accountants.

Budgets are, however, the best way to get maximum distributions from your trust on a regular basis with the least back and forth negotiation.

Why? Trustees love documentation. It is part of the prudent procedure they must follow. So give them their documentation to get your distributions.

Invest about 3-5 hours into creating your first budget.

Then each year thereafter invest 1 hour updating it for changed circumstances.

That’s all you need!

So where to start?

Step 1: Go to our download section and click on Beneficiary Forum Budget (or simply click here)

Step 2: Print the budget (3 pages total).

Step 3: Using a pencil with eraser, fill in all the items that you know exact amounts for. Do this as quickly as possible. Under 45 minutes if you can. (e.g. Housecleaning $60×4=$240/mo = $2880/yr)

Step 4: Next, locate all the household bills you can and fill in exact amounts for the current month (e.g. Electric $298/mo = $3576/yr).

Step 5: Fill in any items that don’t apply with a zero (e.g. trash removal).

Step 6: Tape the budget to the wall above your desk and each time a bill comes in for the next thirty days, fill in the amount right away.

Step 7: For irregular payments (e.g. Veterinary) call your service provider to get the annual amount paid last year. Divide by 12 and enter monthly amount.

Step 8: Estimate smaller items (e.g. movies and theatre) and fill in.

Step 9: Count the number of blank expense entries. When you have less than 10 blank, you are done.Your goal is “COMPLETION NOT PERFECTION”

Step 10: Go back to the computer and fill in the boxes on the budget spreadsheet. The budget is in Excel so you may simply fill in, save and print or get another person to help you do this. Save your budget as [Your name 2008 Beneficiary Forum Budget] and email to your Trustee right away.

We have created a special letter you can use to accompany your budget which can be found in our Letter Library or simply click here.

Ever wonder what would make your Trustee take notice of how ready you are to receive trust distributions? Read our three part guide on how YOU can be a better beneficiary and help both yourself and the long term health of your trust.

Step 1: Getting employed

If you are depending on your trust for more than 90% of your financial support you will almost certainly feel helpless and at the mercy of the Trustee.

Know that trusts are almost never established to provide 100% sole support, rather they are set up for “supplemental” support and “safety.” This means the Trustee is thinking 10 steps ahead to your old age, health needs, housing needs and general “safety net.” The thought of a beneficiary draining the trust for current needs, while contributing little or nothing to his or her own cash flow, keeps Trustees awake at night.

The sooner you can secure your own sources of income, the better. Examples would include traditional office employment or online / virtual employment. We recommend career training and coaching. Most Trustees would be more than willing to reimburse these costs.

If you are considering running your own business as a source of income, you will certainly need to present a formal business plan to your Trustee for funding. Be prepared by submitting one to the Trustee in advance of a distribution request.

Step 2: Getting budgeted

If you are disorganized with your finances, you will certainly not instill confidence in your Trustee that you are able to handle distributions responsibly.

The fastest way to “prove” to your trustee that you are organized with your finances is to prepare a budget outlining your monthly and annual living costs. We have tools available on https://www.beneficiaryforum.com to prepare a fully detailed budget (see links below).

The more detailed the budget the more likely a Trustee will be to make distributions in full and on a recurring basis. We recommend doing a fully detailed budget in year 1, then updating it each year thereafter.

If your distribution is limited to say “housing” you can prepare a mini-budget with only items that pertain to your housing costs.

Step 3: Getting Scheduled Trust Reviews

The more time that elapses between trust reviews, the greater the likelihood of conflicts, errors and frustrations.

If the Trustee is not meeting with you regularly, it is incumbent on you to schedule trust reviews on a regular basis and to review your trust investment statements each month.

We recommend meeting with your Trustee at least once per year. If the Trust is greater than $10 million we recommend meeting every 6 months. The meeting need not be in person. It can be by telephone conference call or video conference (e.g. Skype).

For the meeting, you should review the last 6-12 months of investment activity, distributions, and taxes and commissions paid. You should list all of your questions and email them to the Trustee at least two business days prior to the meeting.

The meeting should be most focused and productive use of both your and the Trustee’s time. The focus and attention you bring to the meeting will signal to your Trustee that you are a serious, studious beneficiary worthy of distributions.

1. Contact Executor
   If your sibling is named as your mother’s executor, simply ask him/her for a copy of her final Will and a list of her assets.  If that does not work, go to step 2.
2. Contact Estate Attorney
   As a beneficiary, you are entitled to receive information relevant to your inheritance.  Your mother’s estate attorney should be able to provide you with a copy of her Will.  If that does not work, go to step 3.
3. Contact Probate Court
   Call the probate court in the county where your parent lived at death.  So for example if your mother lived in Westchester County, New York at her death you would call the probate court and ask to get a copy of her Will as probated.

The probate court judge is called a “Surrogate Court Judge” so you would search online (Westchester NY Surrogate Court).  Ask to speak to the Clerk of the Court about getting a copy of your mother’s Will.  You will need her name and date of death.  There may be a small filing fee or other form necessary to honor your request.

1. Reach out.
   In the first few weeks after Mom’s death, reach out to your siblings by phone, email or in person to support one another and reaffirm what Mom would have wanted — that you all get along in finalizing her affairs.
   Typically only one or perhaps two of the siblings are named Executors of Mom’s estate, however, all siblings should be fully informed of estate developments and decisions.
2. Involve spouses.
   Although spouses have no part in your parent’s estate they will be important “voices” in the estate administration process.  It is better to have them join meetings and ask questions than to have them silently sabotage the estate administration process.
3. Overinform siblings.
   Whether or not specific information is customarily shared with siblings during an estate administration, it is always better to overinform than underinform.  At a minimum, make sure all siblings have a copy of Mom’s Will or Trust and a listing of her assets.
   Siblings should also receive weekly or monthly estate updates directly from the Executors and/or the estate attorneys.   The updates would let everyone know what to expect next and to solicit questions from siblings before they become misunderstandings.
4. Expect delays.
   Distribute an estate timeline to all siblings so they know how slowly an estate administration can move (typically 2-3 years).  The estate attorney should be able to provide a timeline template.
5. Get participation.
   Ask siblings with special skills (e.g. real estate, antiques, investments) to contribute to the estate process directly by delegating some specific responsibilities to them.  This will make them a stakeholder in the process and much more invested in a smooth, successful estate administration.
6. Intervene early.
   At the first sign of misunderstandings or infighting, ask the estate attorney to set up a joint conference call with all siblings, their spouses and the fiduciary team (Executors, estate attorney, estate paralegal, estate accountant) so that everyone can their questions in one organized forum.
7. Mediate.
   If early efforts fail, hire a specialized estate mediator immediately to prevent costly estate litigation and to get Mom’s estate back on track.

Revocable Living Trusts are extremely useful in the following cases:

1. Client is Over the Age of 75 or in Poor Health
   There is no better way to manage assets through a period of mental or physical disability than with a revocable living trust.  The trust provides for lifetime, disability and post death distributions.  The trustees are “at the ready” and the client’s assets are consolidated in one place.  The next best option is granting trusted family members, friends or an advisor a Durable General Power of Attorney.  This document expires at the client’s death, however. The Revocable Living Trust provides for continuity after death.
2. Any Risk of Will Contest
   Where there is any risk of a Will contest such as a disinherited family member or a same sex couple with unaccepting family members, the revocable living trust, pre-funded during life, to a great extent protects the estate from a challenge.  The most common challenge in Will contests are based on undue influence or mental incapacity both of which are not present (or extremely difficult to prove) when a client works with an estate attorney to establish and fund a revocable living trust.  The sort of funding transfers and collaboration needed in the revocable living trust planning process would bring any such problems to light.
3. Clients with a Net Worth of Greater than $20 Million
   For higher net worth clients, often with multiple residences, it makes sense to avoid ANY delay in distributions after death.  These clients can consolidate bank and brokerage accounts in one place to have a coordinated estate plan.  Any delay in probate and the required court appointment of executors and trustees could subject the estate to stock market swings.  The Trustee of a Revocable Living Trust would already be in place and could act quickly to re-allocate or liquidate assets.

There are a multitude of reasons to have a revocable living trust.  We can’t begin to cover them all, but we will touch on three reasons very briefly here.

Reason #1: Protecting Property for Certain Beneficiaries

When most of us think about estate planning, we think about passing our property to our family and other loved ones after we die.  However, sometimes our intended beneficiaries are unable to handle an inheritance.  Minor children are the most common example of this.  Minor children aren’t even allowed to own property in many states.  In most states, a guardian is appointed to hold the property on behalf of inheriting children until they are legally old enough to own property.  Most minors and young adults simply lack the capacity to handle substantial funds without guidance.  The continuing trusts for descendants established under a revocable living trust do not face the same administrative requirements that testamentary (e.g. Will based) trusts do.

Reason #2: Managing Property upon Incapacity.

A major concern today is the idea of outliving your assets.  Many people worry about whether or not their parents can live in their own homes.  Many worry about how their parents’ bills are being covered and about the safety of their money from other people.  Unfortunately, in the case of parents who have not done adequate estate planning, the only option is to file an application with the probate court for a guardian.  That’s a jaw-grinding experience, because it exposes personal and financial information to total strangers.  Besides, it’s a humiliating indignity to be declared legally incompetent.

Don’t put your own children through that painful experience.

A revocable living trust solves this problem.  A revocable living trust allows your successor trustee to take control whenever you resign or are incapable of handling your affairs.  There is typically no interruption in the management of assets, and there is no court supervision.  Revocable living trusts also enjoy a greater level of acceptance throughout the legal and financial community, and almost all states provide a broad range of statutory powers regarding the management of trust property.  While it is true that a living trust isn’t effective unless your property is in the trust, a durable power of attorney will enable your attorney-in-fact to transfer property into your trust if you can’t do it on your own.

Reason #3: Avoiding Probate.

When you die, property in your revocable living trust will not go through probate.  That’s because the living trust itself spells out who gets to take ownership of the property.  It’s very similar to 401(k) plans, life insurance, annuities, IRAs, and company retirement plans.  Since those properties each have a designated beneficiary, those properties do not go through probate but, rather, pass to the beneficiaries without the time delay and expense of probate.  The probate process in New Jersey is fairly straight forward, but New York is not.

Jointly owned property with a right of survivorship does not go through probate either.  It passes automatically to the surviving joint owner.  Unfortunately, relying completely on joint tenancy laws is not advisable.  In the case of widows or widowers it may result in an unequal distribution to children, unintended tax consequences and sibling conflict.  A revocable living trust allows clients to consolidate assets and distribute them efficiently during disability or after death.

Estate Planning can be Daunting

The process of planning your estate can be a daunting task.  The good news is that you don’t have to do it alone, because we are a law firm dedicated to helping you develop and monitor a complete plan that achieves your desired results and minimizes the obligations of your loved ones.

You may be young, healthy and self-supporting and the idea of actually needing long-term care couldn’t be further from your mind.  But what if that changed overnight?

An accident…

A sudden illness…

An unexpected diagnosis…

Any number of things can take away your health and your independence.

Chances are very good that your regular health care coverage won’t cover the expense of long-term care.

Add to that the fact that statistically if you live beyond the age of 65, you are likely to spend an average of 2.5 years in a nursing home.

Don’t wait until you’re older to plan for any of these possibilities.

Now is the time to plan and this is what you need to know:

What Exactly Is Long-Term Care?

Long-term care is a number of broad range supportive medical, personal and social care you need to take care of basic living for an extended period of time.  The care can be given in your home or in a specialized nursing facility.

What Can You Expect to Pay?

Long-term care averages about $200/day.  If you spend one year in a nursing home, that works out to about $73,000 a year.  Now imagine what it will cost for that average 2.5 years you can expect to spend in a nursing home.

And contrary to popular belief, Medicare does not cover those expenses.  Medicare will pay for 100 days of care to recover from a specific illness or injury.  That’s it.

One of the best things you can do to plan ahead is to purchase long-term care insurance.

What To Look For In Long –Term Care Insurance

1. Make sure you pick a carrier that will be around awhile.You probably won’t need to use your policy until you’re at least in your 70’s but you want the carrier you’ve chosen to still be around when you do need them.

2. Pick the right elimination period.The elimination period is the time between when you start receiving care and when your benefits kick in.  Usually the longer your elimination period, the lower your annual premium.  Since Medicare pays at least part of the first 100 days, you might want to consider having your benefits start after that first 100 days has expired.

3. Consider your current age.Most people buy long-term care insurance in their 50’s while they’re still healthy.  The older you are when you buy the coverage, the higher your premium.

4. Decide how long you want the policy to pay benefits.The longer the period it pays, the higher your premium.  The most popular choice for the coverage period is 5 years because that covers the average 2.5 year stay and still gives you some “wiggle room” if you need coverage beyond that point.

5. Think about how much you want your policy to cover per day.Check around with local long-term care facilities and see how much they cost per day.  The cost will vary according to the care provided and your location.  If you want to remain in your home, plan for a higher daily cost.

6. Make sure your policy takes inflation into account.Just like everything else, the cost of long-term care will continue to rise and will probably cost considerably more when you actually need the coverage.  On average you should plan for an increase of about 5% per year.

Long-term care insurance is a great way to protect your assets and make sure that you have the help you need when you get older.  There are a lot of options out there when it comes to insurance providers, benefits and costs.

There is a widespread misconception that estate planning is simply a method of directing one’s assets to designated beneficiaries in the event of death.  That’s simply too narrow of a view.  Estate planning is necessary–crucial in fact–in the event that you become incapacitated or otherwise need a loved one to manage your finances. This can happen, for example, if you are about to undergo surgery with a prolonged recovery period.

In addition, proper estate planning may be necessary in order to reduce an estate tax burden.  Protecting your property is complex.  The amount of money and other assets you have will determine the type of planning best suited to your needs, so the first step of creating any estate plan is taking a thorough inventory.  Depending on your needs, the management of your wealth can involve the creation of revocable living trusts, wills, lifetime gifts, and life estates.

The assets that need to be identified and evaluated when creating your estate planning strategy include investments, real property, insurance policies, and personal effects.  The bottom line is that you want to do whatever is necessary to make sure that your assets are properly managed, that your wealth is distributed to your beneficiaries in accordance with your wishes, and that your tax burden (if any) is minimized.

The Process

Beyond taking an inventory, there are four basic components to estate planning:

• Property Law
  It is important to understand that in the absence of estate planning, property is passed according to a succession plan mandated by law.  The process of estate planning allows individuals to trump the law of succession and make sure their own wishes are fulfilled.  Estate planning also relieves loved ones from the responsibility–the often painful and embarrassing process–of going before a judge and publicly discussing family matters in the event of an incapacitation.
  All assets are subject to property law in one way or another, including cash, stocks, bonds, life insurance policies, retirement accounts, and of course real estate.

• Legal Documents
  The two most common documents in an estate plan are wills and living trusts.  These documents contain your instructions for the distribution or management of your assets.  These documents name an executor who will be responsible for the execution of your instructions in the event of your death or incapacitation.

• Estate Taxes
  Understanding your tax burden will help you develop a plan to minimize taxes.  The amount of taxes due upon your death will depend on the value of your assets, and the laws in this area are constantly in flux.  Currently, there are federal estate taxes and you may have an additional state tax burden, depending on where you claim permanent residency.

• Financial Goals and Plan Development
  There are many ways to protect your assets, pass wealth, and minimize taxes.  The type of property you have acquired and your financial goals will determine the methods you need to implement to protect your property. Your financial goals should include asset protection before and after death, which may involve “gifting” some of your assets during your life, either to individuals or to trusts set up so that you make sure gifts are used according to your wishes.

In order to develop and implement a plan that meets your specific needs, you should consult a knowledgeable professional.  You want to choose an attorney who specializes in estate planning and has implemented systems to ensure that a comprehensive plan is created for every specific situation, not an attorney who dabbles in estate planning.

Let a Professional Guide You

You’ve worked hard to acquire the assets that you have, and you shouldn’t ever have to worry about how those assets will be passed on in the event that something happens to you.  You should know that it will benefit the people for whom you care most.

Immediately after Death:

1. Call the Funeral Director
2. Call your clergy person
3. Notify immediate family members
4. Decide on time and place of memorial service / funeral

Note: Check with estate attorney’s office for instructions re: memorial/funeral wishes

Discuss with Funeral Director:

1. Obituary and newspaper which should publish it
2. Select casket or arrange for cremation
3. Select pall bearers/ushers (if desired)
4. Select charity in leiu of flowers or select flowers
5. Select place of burial / family plot
6. Select call hours / reception after service (if desired)
7. Discuss arrangments with clergy person
8. Arrange for flowers – delivery and clean up after service
9. Create guest list of family, friends, business colleagues and civil organizations

Let Friends:

1. Notify the decedent’s other friends
2. Answer phone/door
3. Make record of calls, flowers, food donations
4. Arrange child care
5. Coordinate supply of food for next few days
6. Special household needs
7. Notify estate attorney
8. Notify insurance company and social security administration
9. Check on income for survivors
10. Check on insurance death benefits
11. Check on all debts
12. Send acknowledgements for food, flowers and memorial donations
13. In some way notify all family and friends who were not notified before the service

Legal Papers Checklist:

1. Collect death certificates (from funeral home)
2. Collect insurance policies
3. Collect marriage license
4. Collect birth certificate
5. Collect Veteran’s benefit / discharge papers
6. Collect social security number
7. Collect most recent tax return

Estate Administration:

1. Contact estate attorney office to probate Will and file federal and state estate tax returns
2. Notify life insurance and annuity providers of death and begin collection of benefits
3. Notify retirement plan providers of death and begin collection of benefits
4. Notify VA of death and begin collection of VA survivor benefits, if any
5. Notify Social Security Administration of death and begin collection of survivor benefits, if any
6. Determine other employee benefits and begin notification and collection process
7. Change titles and ownership of house
8. Change titles and ownership of cars
9. Pay off and cancel credit cards
10. Retitle or cancel social memberships (return of bond where applicable)
11. Collect and consolidate bank and brokerage accounts into an estate account from which taxes and administrative expenses are paid
12. Search and inventory safe deposit box

Note: An estate attorney can guide you through the complex maze of administration and ensure that all assets and benefits are valued and reported properly to all applicable tax authorities, are distributed to the correct beneficiaries and comply with legal requirements (e.g., probate).