Posted on July, 2021
Dear Clients and Friends,
In the office this month.
Adding a Current Trustee
When a husband and wife create a joint trust, naming themselves as Co-Trustees, it is almost guaranteed that one of them will die leaving the other as the sole Trustee. There will always be a named successor Trustee to take over if the remaining sole Trustee dies or becomes incompetent. To be declared incompetent for purposes of the successor trustee taking over as Trustee, the trust document usually has a clause that states a Trustee is incompetent when two doctors state that in writing.
Many times, the sole surviving Trustee has not been involved with the family finances and has no experience to draw on to act as a Trustee. Other times the surviving Trustee has mild dementia which impacts their ability or desire to act as Trustee but not sufficient to have two doctors declare their incompetency.
The solution is to have the sole surviving Trustee sign an amendment naming the Successor Trustee to be a Co-Trustee with either of them acting alone.
For example, if the husband dies, leaving the wife as sole surviving Trustee, the wife signs an amendment to the trust naming one of the children to be a Co-Trustee with her. The wife does not give up any rights, she shares the rights of a Trustee with the child named as Co-Trustee.
This amendment will save the usual legal work required to make the child a Trustee when the wife passes. If you have a trust where you are the sole Trustee, consider naming your successor Trustee as a Co-Trustee to help you in the future.
Avoiding Probate of Savings Bonds
A new client came in this month with a stack of U.S. Savings Bonds Series EE. Her husband had purchased them in his sole name. When he died two years ago, all of his other assets were either joint or had beneficiaries so no probate had been opened.
She asked me to help her open a probate file in the court to cash in the savings bonds. I was happy to tell her that would not be necessary. The Department of Treasury has a website called “Treasury Direct”. On that website, click on “Individual Investor”, then click on “more, and then click on “what to do when the owner dies”. That will take you to form 5336 to complete. Mail the form to Treasury Direct with the bonds and they will cash them for you! You do not have to pay to open a probate file to get certified copies of Letters of Authority.
This is a great website for all things relating to U.S. Savings Bonds.
A new client brough in a deed conveying property to her parents and to her. The wording on the deed was:
“...convey to Robert Smith and Mary Smith, his wife and Linda Jones.”
Her father had recently died.
There was no language creating a joint tenancy with rights of survivorship which would avoid probate. The statutes say that in the absence of language creating a joint tenancy, the parties are considered as “tenants-in-common". That means that if one dies, their share passes to their heirs according to their will, if any, or the law of intestacy if there is no will.
The client asked me to open a probate file to transfer her father’s interest. I was pleased to tell her that it would not be necessary. There is an exception in Michigan Law relating to the law creating the tenants-in-common. That exception states that when a conveyance is to a husband and wife, they are treated as “tenants by entireties” which has the same result as joint tenancy. That means that the husband's interest passed to his wife automatically on death. No probate would be necessary.
The property is now owned by the mom and daughter as tenants-in-common. We are now doing a ladybird deed to avoid probate when the mother or daughter die.
The lesson here is to review all your deeds to make sure they do not create tenants-in-common. Many deeds, especially among family members, are created by friendly real estate agents, other family members using internet forms or the parties themselves and are not accurate.
Remember also, if you have moved since you were last in the office, you probably need to update the new deed to your trust or to your beneficiaries. I continue to offer a free consultation to review your estate plan, including your deeds. Just call the office and ask Melissa to set up a day and time for your free review, either on the phone, zoom, facetime, or in person, whichever you prefer.
Please see our website, www.gfalawfirm.com to view our updated list of seminar dates and times. Sometimes our handouts from previous seminars might not be up to date on changes or cancellations. This website has the most current information.
Susan continues to be in remission for her three kinds of cancer. Her last treatment was October 2020. She has a cat scan ever 90 days to make sure nothing has returned. She tested clear in late June, and we hope this trend continues.
We are so pleased to help you with your estate planning needs. The best way to receive new clients is through referrals from you. In addition, there are people out there searching for someone to help them. They feel comfortable calling an attorney that has a 5-star rating and details of client experiences. If I may, I would like to ask all of my clients who have not done so yet, to provide a Google Review for me. It may help someone out, that doesn’t have a referral available, find me! Simply type “Gary Allen attorney” and hopefully my information should pop up (if it doesn’t, call me). On the right of your screen are gold stars and the number of Google reviews I have. Click on the google reviews and it will take you to my reviews. Then in the top right corner it says in blue “Write a review”. Click on that to provide a review. It may have you sign into your Google account if you haven’t already. Thank you!
Please feel free to share this newsletter with your friends and family.
Very truly yours,