The administration of a trust following the death of its creator is usually left to a trustee. However, many legal experts now advise appointing a trust protector as a supplement for a trustee, rather than a replacement.

The use of a trust protector is a relatively new concept in California and is beginning to circulate among estate planners.

The trustee is responsible the administration of an estate while a trust protector oversees the administration and has the ability to take action when needed to make sure the intention of the settlor is carried out.

Families with a moderate or sizeable number of assets often use revocable trusts in estate planning, which revert to irrevocable trusts once the settlor dies. Problems arise for trustees when irrevocable trusts do not reflect changes among beneficiaries, often caused by a settlor’s inattention to the trust before death.

A trustee may be following a trust’s instructions to the letter by distributing a large sum of money to an heir, but what if the heir is not qualified to handle it? Trustees cannot use their own discretion to change how a trust is administered. Trust protectors have more flexibility.

Trustees and beneficiaries have the option to ask a court to change the terms of an irrevocable trust. A trust protector, whose main duty is to fulfill the settlor’s wishes based on knowledge of any changes, may not need a court’s permission to act.

Trustees are bound to distribute assets among heirs as the irrevocable trust states. A trust that was created but ignored during the settlor’s lifetime may not take into consideration changes that end up limiting the trust’s effectiveness – a beneficiary’s continued worthiness to receive a large sum, an heir’s divorce or disability, a change in laws or some other significant event.

A trust protector can assess beneficiary needs and take actions, often without court approval. A protector can replace trustees or beneficiaries that fail to live up to the settlor’s standards.

In addition to the other named responsibilities, a trust protector may also become a watchdog for a trust as a fail-safe backup for a decedent who was lax in staying current with estate planning.

Ultimately, the decision to add a trust protector is a choice that could reduce court involvement in an estate.

Source: montereyherald.com, “Liza Horvath, Senior Advocate: Add a trust protector,” Liza Horvath, July 2, 2012

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Artist Thomas Kinkcade died of an alcohol overdose last April. He left multiple wills, including two holographic or handwritten wills that are causing a legal dispute. A probate court judge must decide if two letters Kinkcade wrote are valid and whether a court battle will take place.

Kinkcade and his wife were estranged, but not divorced. The artist lived with another woman at the time of his death. A lawyer for Kinkcade’s girlfriend claims the holographic wills supercede an earlier will Kinkcade signed with his wife.

In the first letter written in the November before his death, Kinkcade allegedly bequeathed $10 million to his girlfriend. A second letter in December changed the plan. The will left a house to the live-in companion and $10 million to the creation of a public art museum containing his works.

Attorneys for the Kinkcade estate, including Thomas’s estranged wife and the artist’s holding company, say the letters do not qualify as wills.

Kinkcade was an alcoholic, which estate attorneys say influenced the artist’s ability to be of sound mind and body. Handwriting experts proposed that the 54-year-old artist was incapacitated, either mentally or physically, when the letters were written.

The lawyer representing Kinkcade’s girlfriend contends alcoholism does not legally eliminate an individual’s mental capacity. Handwritten wills are acceptable under California law, provided the writer had capacity and no undue influence at the time they are written.

The estate attorney said that Kinkcade did approach his lawyers about leaving something to his girlfriend. The lawyer stated that whatever that “something” was did not include items listed in the letters.

Kinkcade and his girlfriend were together for 18 months. The girlfriend claimed the couple planned to marry following the finalization of Kinkcade’s divorce. Kinkcade was married 30 years and shared four daughters with his wife, Nanette, who assisted Kinkcade with his art businesses.

Source: sacbee.com, “Validity of wills at center of dispute over artist Thomas Kinkcade’s estate,” Julia Prodis Sulek, June 19, 2012

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When friends or loved ones are creating their estate plan, it generally involves having a will drafted. Another part of this process is choosing the best person to be in charge of executing the will and ensuring that the details of the will are followed, as well as other important processes. That individual is called an executor or in some states, a personal representative. For many would-be executors, he or she has no idea what responsibilities are involved until after the will goes into effect and at that point, can feel very overwhelmed. A recent article provided some helpful tips for executors to aid them in their obligations.

California executors are charged with performing duties that can require informed decision making, diplomatic family efforts and perseverance.

An executor is charged with immense responsibility for the disposition of another person’s assets. This is not as effortless as reading grandma’s will and distributing antique china to Cousin Betty. Executors carry out terms of a will, which may involve impatient heirs, estate disputes and probate court.

An executor may refuse the position of estate administrator. Contingent or court-appointed executors can step in to take over the duties. The position does not have to be as chaotic as it appears, especially with the advice of expert financial and legal counselors.

Since executors are often close relatives of the decedent, the most complex part of the task may be coping with strong emotions while carrying out administrative affairs. The executor’s first responsibility usually involves the arrangement of the deceased’s funeral and burial.

A funeral director will ask how many copies of a death certificate are needed. Executors often have not had time to think about this. Most advisors suggest requesting double the number of certificates that might be needed for financial accounts, tax agencies, creditors, insurers and benefits’ providers.

Finding the will or trust is the next step, usually with the help of the attorney who created the documents. If a living trust exists, probate could be avoided. If not, a court will require a copy of the will within several days up to a month after a decedent’s death.

Not every part of an estate must be entered into probate. Trust asset distribution does not have to wait until the probate process is complete, a process that can take several months or even years.

Most executors need professional help. Estate attorneys and financial consultants aid executors by answering questions, filing timely tax and court documents, averting errors and streamlining the entire process.

Another important tip provided is that executors may not disburse any assets until the probate process ends and creditors, including tax debts, are paid. The delay may be longer than beneficiaries, or even the executor, wants to wait. That can make having a competent legal advisor all the more valuable.

Source: foxbusiness.com, “Seven Tips if You Are the Executor of an Estate,” Judy Martel, June 13, 2012

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Wills are rarely hidden from public view. However, some Hollywood celebrities and other famous people request the sealing of a will for privacy.

Earlier this year, legendary Penn State University football coach Joe Paterno died of cancer. A county judge sealed Paterno’s will in April at the request of his estate. Estate administration officials and Paterno family members called the rare request “appropriate” for “prominent individuals.” Paterno was survived by his wife, Sue, five children and 17 grandchildren.

Paterno’s fame was due in part to his Division I college football win-record. Paterno was head coach of the Nittany Lions from 1966 until last year. In November 2011, university trustees fired the longtime coach over backlash from a child sex abuse scandal, involving assistant coach Jerry Sandusky.

Paterno died two months later, in the wake of charges against his former defensive coordinator. Paterno was not criminally implicated, but much of the media spotlight fell on Paterno because his fame and professional association with Sandusky.

The Paterno family apparently had a change of heart. The estate announced it would ask the court to unseal the 1997 document and future, related court filings. The family said it reversed the decision to “ensure maximum transparency” and avoid “unfounded speculation.”

It was reported that Sue Paterno, the coach’s wife and the will’s “personal representative,” inherited the coach’s personal property. The remaining estate was left to a trust. Family statements did not include the worth of the estate.

Some of the coach’s personal wealth has been documented. Records at the university revealed that Paterno earned $1 million in his last year at Penn State. An additional $3 million was paid to the Paterno family in April for payments connected to the coach’s university job contract.

In May, Paterno’s family made public the size of the coach’s pension — $13.4 million — which, in part, will be donated to college and local charities.

Source: sportsillustrated.cnn.com, “Family releases Paterno’s formerly sealed will,” June 15, 2012

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Los Angeles actress Reese Witherspoon and her brother were in probate court last month to request a conservatorship for their 70-year-old father. Reese’s mother, Betty Witherspoon, and father, John Witherspoon, have been married for more than 40 years.

The couple separated in the mid-1990s because of John’s unfaithfulness, alcoholism, hoarding and spending habits, according to Betty Witherspoon. The actress’s parents still meet at family functions. Both were present at Reese Witherspoon’s 2011 wedding.

Reese’s mother filed an affidavit saying she discovered a published wedding announcement showing her estranged husband had married another woman. Betty Witherspoon contacted John. Apparently, the elderly man could not recall that the second wedding had taken place or the name of the bride.

Betty Witherspoon has accused John’s new wife of elder exploitation. The 63-year-old Betty said she believes the woman illegally signed for a $400,000 loan and altered the elderly man’s will.

The estranged wife wants John Witherspoon’s second marriage dissolved to protect him from bigamy charges. The actress’s mother is demanding that the woman claiming to be John’s wife vacate the family’s properties and return any possessions.

Betty Witherspoon contends her legal action was motivated by safety concerns and the love she says she still feels for her estranged husband.

A probate court may order a conservatorship for a person who is disabled or incapacitated by physical or mental illness. A medical or psychiatric evaluation helps to determine the ability of an individual to care for themselves and what they own.

If John Witherspoon is suffering from dementia, a conservatorship can protect him from making decisions that could harm him. Family members most often file conservatorship requests. It is likely that one, or both, of John Witherspoon’s children are now charged with looking out for the elderly man’s personal and financial interests.

John Witherspoon’s conservatorship hearing was closed to the media. A probate court will decide later this month if a petition from the local media to unseal court and open future hearings to the public is valid.

Source: bradenton.com, “Lawyer asked to investigate Witherspoon case,” May 31, 2012

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Planning for our deaths is not high on the priority ladder for most Los Angeles residents. However, as we get older, we begin to come to terms with the inevitable — our mortality. What more, as parents, it isn’t always a pleasant topic of conversation to have with our children.

Recently, an article covered some helpful tips on how to draft an estate plan. It also reviewed some key talking points to communicate with any children or family members so that when the inevitable does occur, everyone who needs to know the details of the estate plan is all on the same page.

As many adult start planning for retirement and seriously contemplating an estate planning strategy, they also evaluate the plus and minuses of their loved ones. Parents need to look at their children’s strengths and weaknesses, such as; who is better at handling money and who can they count on for long-term care.

One of the first steps recommended is to determine who to make as the executor of the estate. Not only is it important to make that decision but to also have a conversation with the person who you would like to designate. That conversation should include information like where the will is located and if there is an attorney involved in drafting and/or storing the important documents.

Also, it is recommended to talk about whether or not you have a living will or advanced medical directive. If you ever become incapacitated, it is important to let loved ones know how you would like your medical care to be handled; for example, whether or not you would like life-saving efforts to be performed by medical personnel.

Lastly, it is important to make a list of where everything is located. While bank accounts, insurance plans and the family bible may be some of the first thought for most families, in today’s era of electronic information, it is also helpful to have a list of online accounts that need to be closed and updated.

While it is never easy to talk about death, not communicating with loved ones can lead to a lot of trouble and difficulties for surviving family members.

Source: Your Smart Money Move$, “What Four Estate Planning Things Parents Should Tell Their Children,” Ted Jenkin, May 31, 2012

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