October 2023.
Q: I have a disabled daughter. Do I really need a trust? Can’t I just leave everything to my son to use for his sister?
A: Yes, you can do that, but I’m not sure you should do that. If you leave everything to your son to use for his sister without any written direction, nobody knows that the assets aren’t the property of your son. That means that if your son has an auto accident, or becomes ill and unable to pay his debts or living costs, or gets a divorce, everything you’ve left him, including the amount that he was to use for his sister, is available to his creditors, or to his soon-to-be-ex-spouse. If you do leave written direction, you’ve just created a trust, and the written direction you’ve left is the terms of the trust. Because these kinds of informal written direction are usually imprecise and general, it can be hard to figure out what you really intended for your son to do with the money, except that it’s for his sister. That can make all of the funds available for your daughter’s cost of care, which is exactly what we’d try to avoid with a properly drafted trust. We really need to talk about a trust for your daughter.
Q: Why is my trust so long?
A: It’s true, these legal documents are very long. Honestly, we could create a trust with a single sentence: “I give my money to my son to use for my daughter.” That’s a trust. We know who the beneficiary is – your daughter; we know who the trustee is – your son; and we know that there’s a trust because your son is designated to hold the money – the “corpus” – for his sister. You’re not giving the money to your son for his own use, but for the benefit of your daughter. But that’s pretty vague, so we start “filling in the blanks.” What should your son use the money for? Can your daughter force him to give her money? If so, for what? Probably not for buying illegal drugs, but maybe for medical care – or maybe not, if she’s on Medicaid and disability, because if she can make him pay for her medical care, she loses her Medicaid until the trust is exhausted. What if something happens to your son – how do we get another trustee in place? What happens to the remainder of the trust when your daughter dies? If it’s to go to your son, then he has a conflict of interest because he has a reason to deny funds to her – the more she gets, the less he gets. It’s working through these kind of issues that makes your trust so long. Honestly, less isn’t more – more is more. Let’s talk.
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Attorney Tim Barkley
The Tim Barkley Law Offices
One Park Avenue
P.O. Box 1136
Mount Airy
Maryland 21771
(301) 829-3778
Wills & Trusts | Estate Planning | Probates & Estates
Elder Law | Real Estate | Business Planning