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The Importance of Funding Assets into Your Trust

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Have you ever responded to an advertisement for what seemed like a great deal, only to find out that the advertisement didn’t quite tell the entire story? Maybe it was an advertisement for replacement windows that didn’t include the cost of the labor or neglected to mention that the interior of the windows were unfinished and it would cost 25% more to finish the windows to match your interior?

We have all seen this in one way or another.  The same type of issues can exist in the legal world.  Some time back, I was referred a potential client to discuss estate planning issues. The client owned multiple parcels of real estate and had “dysfunction” with some of his children. He wanted to disinherit two of them. After our discussion, I explained what should be done to achieve his goals and I gave him my estimated cost. Initially, he agreed but called me back later to tell me he changed his mind. He told me that one of his friends suggested that he use another attorney who gave them a cheaper price.  Naturally, I was disappointed, but I wished him well.

Recently, I was contacted by one of the adult children of the potential client. He told me that his father had died. The adult child was named as Trustee and a beneficiary. He wanted to know what to do and asked me to review the Trust. After reviewing the Trust, I told the adult child that his father had made him the sole beneficiary of his trust, but that only four of the 11 properties had been funded into the trust. The remaining properties remained in the name of the deceased father AND the deceased did not have a Will. The end result is that one son who was the sole beneficiary of the Trust will receive all the properties funded into the Trust, but the remaining properties will need to go through Probate Court. Since there is not a Will, the remaining properties will pass through the Probate Court as “intestate” and will be distributed under Ohio’s statute of “Descent and Distribution”. This means that all three of the decedent’s children will share equally, despite that the deceased father wanted a different result.

Not the result the father wanted! The “sweetness of a lower price” can be “soured” by an unanticipated and unwanted result!  Is your trust “funded” correctly? Is it funded at all? Did you discuss funding at all when you created your trust?  If you are not sure, please feel free to give us a call so you don’t get an unanticipated and unwanted result.

Charles McClenaghan is Of Counsel at Lardiere McNair, LLC.  To read more about our firm, please visit www.lmcounsel.com.

The information presented here has been prepared by Lardiere McNair for promotional and informational purposes only and should not be considered legal advice.  This information is not intended to provide, and receipt of it does not constitute, legal advice.  Nor does the receipt of this material create an attorney/client relationship.  An attorney client relationship is not established until such time as Lardiere McNair enters in to a written engagement agreement with a specific client for a specific legal matter.

 

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