Living Trusts - A Smart Way to Avoid Family Problems

Living Trusts - A Smart Way to Avoid Family Problems
By Roger McCaffrey-Boss
Copyright by Gay Chicago Magazine and Roger McCaffrey-Boss
July 17, 2007

For all LGBT couples there is always the concern that if they should die, their families will try to contest their wills, and if successful, their lovers could be left with nothing. Although will challenges are seldom successful, the threat of the negative publicity to a surviving lover might intimidate a successful outcome for the family.

In light of possible challenges, anyone who has greedy relatives will want to make sure that their estate plan is ironclad. More and more LGBT couples are using revocable living trusts as a way to efficiently pass on their assets to their partners and to insure that their partners will handle their personal affairs if they ever become incapacitated. A revocable living trust is a legal arrangement where a person executes a written trust document naming themselves as the trustee of their own trust, and while alive, they transfer their property to their trust so that the trust holds legal title to all their assets.

The document creating the trust allows the person making the trust (maker) to at any time dissolve the trust, change the trust or take assets from the trust; always retaining complete control of their property. The trust document can provide for the appointment of a successor trustee (surviving LGBT lover) who would only act upon the death or disability of the maker of the trust.

A living trust offers the following advantages:

* Keeping control. While the maker is alive, he or she has the right to the income generated by the trust and use of the trust property such as the house and furniture. Upon his or her death, the assets of the trust could be distributed to a surviving lover, family, charities or remain in the trust for the lifetime of the surviving lover and then pass upon his or her death.
* Providing for disability. Should the maker of the trust become physically or mentally incompetent, the living trust can serve as the framework for the management of the maker’s assets and property.
* Preserving privacy. Trusts can also serve individuals who don’t want an inheritance to be made public. It avoids problems of friends and family from going into the Probate Clerk’s office to look at the files on their estate and see who got what.
* Avoidance of family disputes. The living trust can act like a will and dispose of the maker’s property upon death. There is less chance of a lawsuit by family members to contest a living trust than there would be with a will. Probate proceedings for a will require notice to family members, which may encourage such suits.

When a living trust is combined with a durable power of attorney, a nondisabled LGBT partner can transfer all of the disabled person’s property to that person’s living trust. Upon the death of the disabled partner, all assets would be owned by the trust and distributed according to the terms of the trust document.

Roger McCaffrey-Boss is a graduate of Hamline University School of Law, St. Paul, Minnesota, and is a member of the Chicago Bar Association. You can e-mail him at RVMLAWYER@aol.com. He suggests that you consult your own lawyer for any specific questions regarding the issues raised in this column.