Nugen Law; specializing in estate planning and elder care law, emphasizing independence and quality of life.

Serving Indiana, Ohio, Michigan, and Florida.

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good evening and thank you for watching PBS here in Fort Wayne .

of the show LIFE Ahead.host- But our real star is sitting here on the sofa beside me and that's Brian Nugent.

If you watch us regularly you know Brian, he's an elder law attorney and every time he comes we have different topics and tonight we're going to basically be talking about probate and trust.

>> But we do want you to call in.

>> This is actually your show, not mine.

I will last questions until you give us a phone call.

>> The number is at the bottom of the stream screen (969) 27 twenty and give us a call Brian loves to take your phone calls and he'll be able to hopefully give you some good legal advice.

>> OK, well if you haven't met him so far, let's meet him now.

Brian, thank you for coming.

Thanks Santa for having me.

>> I appreciate it.

It's good to see you.

Good to see you.

And I hope you had good holidays.

Great time.

Great winner.

>> I appreciate your asking.

Yeah he's great thanks.

Oh good.

It's all good.

And Brian and I always talked a little bit about our dogs or our lives or things that are happening.

>> That's why we didn't we didn't actually share New Year's resolutions yet.

>> But that's OK.

I can't tell you come anyway.

>> Well all right tonight again please give us a call if you have some questions again, Brian loves to get those questions (969) 27 twenty pretty simple.

>> Please call.

All right.pLet's let's start tat probate and trust starting with probate.

Give me a generic description.

A lot of people don't know about it until they have to do estate planning and they hear the word but it's like what does that mean and how does that relate to me?

>> Sure.

So probate the word itself means I take a will and I go to the courthouse and I file the will with the clerk of court at the courthouse that in and of itself is actually the definition of probate.

>> Really what people are wondering is it a verb then what it could be a verb.

It could be a verb I suppose I'm going to know probate, probate, the will and the probate will.

>> So yes, I suppose it is a verb but but really what people are wanting to avoid when they talk about avoiding probate is estate state administration.

So estate administration is the process whereby the whole process we record the will rather file the will we file pleadings with the court.

We ask the court to please appoint someone called a personal representative to represent the beneficiaries in the estate.

We advertise in the newspaper that someone has passed away and that advertising then puts people on notice that if the person that passed away they believe that they're owed money, they have an opportunity to file a claim in the estate and say please pay this claim the probate process itself that estate administration process typically last six months to 12 months depending upon the assets that in the estate.

>> And when I say assets I mean anything that has a value.

So it could be real estate, it could be stocks, bonds, CDs, anything that doesn't have a beneficiary on it, anything that was in the name of the person when they passed.

How do we get that into out of the dissidents name and into the name of the eventual person that's going to be receiving that satisfy any debts, make any final tax returns that need to be prepared and signed?

We we also do that through the probate process so that probate generally probate process that estate administration process is the one where we file the will and we ask the court to appoint a personal representative and we get those assets distributed penny debts that may exist.

>> We have a phone call I'm going to you that already we have a phone call.

So thank you so much and get on the phone.

Give me your question here and then I want to go back and answer some questions about that answer you just gave.

>> AJ called in and he says How do you set up a trust for an underage grandchild when you want it to be set up for when they are an adult?

>> Great question age I thank you for calling in and asking that so typically we so let's just start at the beginning.

What is a trust I like to say trust is just a contract.

That's all that it is you're telling the attorney that's preparing that document for you that instrument for you what it is that you want to get accomplished in this instance you want to benefit your grandchild so you're going to ask the attorney please prepare this trust for me this this contract for me and it will indicate if my grandchild is going to a private school and we want to use money to pay for their private education, we can do that.

We could also say if my grandchild has a wedding we want to be able to pay for that wedding.

We could say my grandchild is going to post post-secondary ducation.

>> They're furthering their education.

We want to have some money available to pay for that.

>> We also could say we want to permit money to be used for clothing or medical issues.

Whatever you dream up age that you want in that trust we can get that accomplished.

But how do you set up a trust for an underage grandchild?

Typically it's scheduled appointment with an attorney.

The attorney will have a meeting with you, two meetings with you, however long it takes for you to really crystallize what you want to do and how you want to benefit that grandchild and that meeting with the attorney the attorney will typically ask you if you are managing the trust during your lifetime fantastic.

If not you, who's going to be the manager of that trust?

Who's going to be the trustee?

>> It could be a trusted friend, a family member.

You could also be a professional trust department there any number of professional trust departments that will manage the money I mean through a bank or could be through a bank or a true trust department.

OK, so there are standalone trust departments that aren't affiliated with banks.

There are banks also that have trust departments within them and they'll look at that contract that trust and they'll interpret it exactly what it says and say OK, this individual set up this trust for their grandchild.

They're going to be receiving this money.

I like to see distributions at different ages.

I like to see multiple bites at the apple.

So you may say my grandchild can use the money for their education and then at age twenty five maybe a certain percentag of the principal of the trust goes out to the grandchild.

Then at thirty they get something else.

>> I have clients that have distributions at forty fifty sixty in any number of ages I have clients will say that principle never comes out.

>> The principle could be used for the benefit of the grandchild but the income stream is going to be there for their lifetime so when you're setting those trusts up the attorney is going to be asking you about who's the trustee going to be if you don't have somebody the attorney typically is going to be direct be able to direct your attention to a formal trust department that could be in the bank Sandy .

It doesn't have to be asking who the beneficiary is who's going to receive those benefits from the trust your grandchild in this instance, when can the trustee decide that money can come out of the trust and be used for the benefit of the grandchild and at what ages are there's money going to be released from the trust to the grandchild or is it going to remain in trust for the life of the grandchild?

>> The attorney most likely will also ask you if tragedy strikes and the grandchild passes before the money is distributed to them, where would you want the money to go?

>> So common questions would be if the grandchild has children do you want it to go to your great grandchildren?

>> So those are some of the things that you should think about when you're going in to speak to your attorney about trusts.

What you normally say to clients is don't worry about the legalese, don't worry about how this is going to happen.

You come in with a concept, you come in with the idea of what you want to get accomplished and the attorney's going to help guide you there.

You may oftentimes within those trusts we also have language that says if the grandchild something happens with a grandchild such that they become a special needs person, how is it that we're going to protect the money inside the trust so that it would last for their lifetime and be able to pay out to them should they need that additional funding as they age and as they have medical concerns or cognitive issue concerns mental health issues?

We might include that language in the trust as well.

So great question age but but typically you'd be speaking with an attorney attorney would be asking you to identify individuals that would be managing that trust your trustees and what terms you would want for the funds to be distributed directly to the grandchild or for the benefit of the grandchild.

>> OK, two questions on that page.

>> Part of his question was setting this up.

How do you set it up if you want to want it to be for a grandchild when they are an adult?

>> So let's say let's say the grandchild now is fifteen can set one up now and say of course if it doesn't really apply until they're twenty or eighteen.

>> That's right.

OK, so your you would say to the attorney I want my grandchild to receive this money at twenty five or 30 or 60 whatever age you want it to be the money to be available for the grandchild you can set up that when the grandchild is six months old, six years old, fifteen years of age and then the money that's put into that trust just continues to grow and it's invested by your trustee and oftentime.

So even when the grandchild is before that age of twenty five, you may say that the trustee has the ability to make distributions from the trust other than at that stage that you've included.

>> So if they're if the trustee sees a need for the grandchild my example was private education or maybe there's a medical issue you're going to put into that trust.

It's OK trustee even though I've said to you principal doesn't have to be distributed until a certain age if there are certain events that trigger prior to that age, it's OK for the trustee to be able to release money oftentimes I'll ask the client and other attorneys that could be working with it I would assume ask you the same question do you want liberal distributions from the trust or do you want conservative distributions from he trust so liberal distribution would be the child is eighteen and they asked for money cut on the check if that if the child wants to go on a trip and they ask for money for the trip, cut him a check conservative would be more of an approach is the person responsible for themselves is the person being responsible for those that are dependent upon their children is the person if they have a drug or alcohol issue are we wanting to make sure they don't have access to those moneys if they're having if they're struggling at that time so we include any of that language that's most appropriate in this instance I typically like the more conservative language.

I think of it as the child.

The trustee is kind of the parent for the child as you would be as a parent.

The child's doing well.

They're going to school.

They're getting great grades going to benefit even more if you're kind of veering off the middle of the road and you're struggling, I may not be benefit you as much until I see you get back to the center.

>> OK, good answers and thank you again A.J.

Good luck with that.

I'm so proud of you for thinking of that already.

I think grandparents just need to do that sort of thing.

>> It happens with great regularity.

Yeah.

And so we can create a standalone trust or you can put a trust inside your will.

>> Those are called testament.

>> OK, so so AJ could go do make set up a trust for whatever amount there's no set amount he could go do that and has nothing to do with this will or you could put it in the will and say OK you know in addition to this distribution that distribution I want X amount of dollars to be put in a trust for this grandchild right.

So when when you pass away and we go through that probate process, that estate administration process at that time a testamentary trust is established for the grandchild.

The money is set aside at that time.

OK, but I understood his question to be I'm establishing an independent standalone trust now versus one inside my well yeah.

>> That's what I felt that meant to if not AJ call us back.

OK, we also have another question I just called in Mary and she says Do all wills have to be probate and good question every everybody has to deal with it at some point going to pass away little or no will.

>> But if you have a will and everybody should, you probably would agree with me on that.

>> But does every will have to be probated?

So technically no Awilda I suppose doesn't have to be probated.

However, I even if we have assets that have a beneficiary on them so let's say that I have a brokerage account and I've designated that brokerage account goes to my children and that's my only asset that brokerage account I still encourage my clients to probate their will spread the will of record.

We don't necessarily have to open an estate and go through that formal estate administration process but I'd like to have the will probated in my rationale for that is kind of twofold.

Number one, if there are assets that are later discovered that will indicates where they should go.

>> So we find an asset that we didn't realize mom had Dad had grandma had whomever it may be and there isn't a beneficiary on it.

We've we've spread that will over record.

We've probated we've now preserved where it is that that money is supposed to go number one.

>> Number two for historical purposes we can see that someone passed a particular age and so we're we're making that kind of publicly declaring this is what happened a person passed on such and such a date.

This was the instrument that they had when they passed away and where those assets what assets were to go.

>> So generally I'm going to tell you all wills are probated.

I suppose there are occasions when someone doesn't probate a will that there are no assets to be distributed.

But generally I like to see wills probate it spread of record and whenever we have them OK, all right.

>> I appreciate that information again.

Give us a call here (969) 27 twenty with anything you'd like to know.

>> All right.

Let's talk about probate and trust in terms of beneficiaries.

>> Do you have to have a beneficiary for every asset?

>> Well, financial assets like an IRA or a mutual fund or something you wouldn't have a beneficiary for your home.

>> Well, you could actually indie so there are let's go let's talk about that.

So how is it that if you weren't using a will what are what other means are available to distribute assets at the time of one's passing?

>> One means of doing that is to do a beneficiary designation.

So I'm a bank and I have a checking account and when I pass I want that checking account account to go to my three children.

So we go to the bank, we designate my three children's beneficiaries.

We may indicate on that beneficiary designation form if a child passes away before I do does it go to my my grandchildren does go to my other children?

How is it cascading after I pass with a simple beneficiary designation?

So if we have a beneficiary designation it skips what our will says, it skips what our trust says and it goes out right to the person that we've indicated is send it to your question about real estate.

>> We in Indiana we have something called a transfer on death deed.

>> Todd, do you do know that legally you got it abbreviation so the Todd transfer on Death Deed indicates actually it was one of the last documents I reviewed today before coming in .

Todd says if I pass away I want this property to go to a particular person or particular persons plural.

So at the time of your passing instead of needing to go through probate to get that real estate transfer to the next person, we record an affidavit.

It's an affidavit in support of title to that real estate.

We record that indicating this person has passed away within their transfer on death deed.

The real state was supposed to be transferred to persons A, B and C please do so county in which the real estate is located.

So if we aren't using a will if we aren't using a trust beneficiary designations are a way for assets to be distributed and there are pros and cons on beneficiary designations, pros and cons on this transfer on death deeds that I think merit a discussion with your counsel before you opt to do that.

I was saying a moment ago that when you have those beneficiary do so back to a question earlier I want my grandchild to receive money and I want my grandchild to receive it at an older age.

I don't want them to get to it until our twenty five or thirty or forty whatever it may be if we do a beneficiary designation in your grandchild is fifteen at the time of your passing the grandchild gets the money at fifteen I will said they don't get it till twenty five.

>> My trust says that I'll get it until twenty five but we use the beneficiary designation so that scripture will its scripture trust and it automatically goes to your grandchild.

So now the guardian or the that money and when the child hits eighteen they get the money.

I'd like to say I was as responsible at eighteen as I am now with money but I don't know that I was I don't know a lot of people are so I'm always cautious about using beneficiary designations alone and on those transfer and death deeds on in concept it sounds fantastic.

I will tell you it is a very challenging situation to own real estate with someone other than a spouse.

So for example, I my parents did a transfer on death deed and they said all right, myself and my sister are going to be the beneficiaries of this of this property when they die.

Hypothetically if my sister passes and her interest goes to her children, I now own that real estate with my nieces and nephews, my nieces and nephews .

They have a very different opinion about how to handle that real estate than I do.

But I own the property with them so I own 50 percent.

>> They own 50 percent now we have to negotiate.

Are we selling it or are we keeping it?

If I have a home and the roof blows off maybe I can afford to replace a roof but maybe my nieces and nephews can't afford to replace the roof.

>> So where does the money come from?

So there are times when transfer and death deeds are appropriate but I use them with a little bit of trepidation.

I like to explain to the client the consequence of using those.

There's nothing wrong with it.

However owning property with someone else you're in now in business with them.

You may love them.

They may be a family member but you wouldn't necessarily be in business with them and that's the situation you've created sometimes with those transfer on death Dede's it's especially touchy when we have really valuable real estate farm ground lake property we want this is generational property we want to maintain year after year, generation after generation and but the next generation that's getting that through that deed they may not have the passion to maintain the lake house.

They may not have the passion to maintain the farm.

But on that transfer we've given it to them and you can create a little bit of that has the potential to create some family family tension if we're not careful.

>> Yeah, well what a tactful word intention.

Yeah, we knew how extreme that can be at times when it comes to settling wills and estate.

We have a phone call another phone call from Jane and Jane.

Thank you for watching us tonight on LIFE Ahead.

>> Here's what she wants to know.

She says Who can take care of your will once you pass if you don't have anyone in your in your life that you felt could take charge?

>> I'm sure great question.

Jane, thank you for asking.

That happens a lot I'm sure does happen it happen you know, if oftentimes if I have clients that maybe don't have children or they have you know, there's a strange relationship with a a strained relationship with her children.

They don't want to appoint them.

They're single person so they're not automatically looking to their spouse to serve in that capacity.

So an attorney is going to push you to come up with a name to serve as personal representative executor that you would name in the will if you really don't have anyone.

We're going to look to what I was referring to before which is that trust department is there a trust department at a bank?

Is there a standalone trust department?

The concern is that person representative the conservative, that executor to make sure that that gets handled.

>> Now let me take your question one step further, Jane.

>> Let's say that you've designated an individual or two individuals and you outlive them and that instance we look to the the code or write the state's code of regulations laws and there's typically a priority of who should be serving as your personal represenative.

So we might look at others that could serve in keeping with the terms of that code if we really don't have anyone, the attorney handling the estate may very well go to the court and say to the court judge we don't have a personal representative to serve.

We haven't appointed anybody.

We can't find anyone.

I encourage you to appoint a particular trust department or another attorney or something like that to serve in order to get the estate probated.

But the attorneys generally are going to push you to try and come up with a name if you can't, we would look to a professional that would be able to serve in that capacity.

>> OK, all right.

So when it comes down to it then it will be handled even if it takes a judge to appoint somebody.

>> Yes, we have another call that just came in from James.

>> We had a lot of calls tonight.

We really appreciate you all great watching and for listening.

And Brian always gets a lot of a lot of phone calls when he's on here to share his experience and his education.

>> James says Are there situations where all or where an emergency or a negative financial situation would allow an early withdrawal or does it have to be specifically stated?

>> I'm assuming they're talking about a trust at all from a trust.

OK, so great question James.

What that tells me when you're asking that is I wasn't as clear as I should have been earlier so appreciate the follow up.

>> So yes, normally we put language into the trust that says here are particular events where the money has to be distributed.

However, if we have an event that arises in advance of those triggers that where it has to come out, we see that the individual really needs it.

We see that they're there an appropriate recipient of money.

Now we normally include language that allows the trustee to use their best judgment to say yes, some principle should go out, some income should go out and then I normally couch that that language about allowing early distributions in that conservative nature saying we should look to other sources that are available to this person.

>> For example, if they're going to they're going to get their college education, have they applied for scholarships?

Have they applied for grants?

Have they applied for loans?

Have they done those things or is there a trigger response?

>> Oh, I've got to trust them to immediately ask the trustee to make distributions to me.

So yes, James, there are times when it's appropriate for money to be released by the trustee in advance of those particular events that you've written into the trust could be date of birth, could be major life events.

So most definitely we want to be able to permit the trustee to make distributions of principal and income if need be and if it's appropriate for that beneficiary and it wouldn't harm them and it doesn't really fly in the face of the trust was trying to do for the benefit of that individual that you've named.

>> OK, all right.

Well if it's not clear by now it ought to be hope so.

So hopefully betwee what was an age question and James question that's clear to you now?

Well, one of the things I do want to tell you before we end our show which is going to be just here in about a minute we're pretty excited now because all of our shows, this show and our other episodes are also going to be airing on YouTube and you can find them again by the name of our show LIFE Ahead.

And our particular guest tonight is Brian Nugent.

In addition to that, of course you can always find our shows on PBS website.

We're a local show.

You click on that and then again the name of the show Life Head and then you can find the segment by the date or by the name of the guests.

So lots of opportunities to watch as well.

>> You can watch yourself also three times this weekend will be airing this show.

Well, thank you all for watching so much, Brian.

>> Thank you.

Always thank you.

Say always have a lot of good information to share with our audience.

>> Thank you.

And they appreciate it too.

All right.

We'll see you next Wednesday night right here at seven thirty tonight