Trusts & Estate Planning

Mark Mackin, Attorney at Law in Montana

Trusts & Estate Planning

An estate includes all the property owned by a person, whether alive or dead. A will (or Last Will and Testament) is a statement of a person’s intention for distribution of their estate after death.*  On the other hand, a trust manages assets for the beneficiary of the trust, whether the donor is alive or dead. Trusts can be stand-alone, as in the case of revocable living trusts, or they may be part of a will. A “testator” is the maker of a will. A “donor” is usually the maker of a trust.

If someone dies without a will, Montana law specifies how the decedent’s property is to be distributed. So, everyone has a default will. See Montana Code Annotated, Title 72, Chapter 11. If you don’t like that general distribution scheme, then consider making a will that suits you better.

Every parent with minor children should make a will, if only a very simple one. In a will, the parent can instruct the courts who should care for their children in the event of their death. Montana courts usually give this instruction great weight.

“Home-made” wills are legal in Montana. But many “home-made” wills are legally void, or do not do what the decedent intended because of mistakes made in ignorance or infirmity. Careful drafting can keep the will out of court or avoid conflicts between heirs.

Avoiding probate court is best done with the help of an attorney. A testator, or maker of a will, may want to avoid expensive lawyers or court expenses that may drain the estate. Trying to avoid probate court, when the estate owes taxes, must pay debts, or includes real estate is a serious and often costly mistake. Mistakes may cause the estate to be distributed in a manner the testator did not intend, or fail to protect property intended for distribution to heirs. A testator who wants to keep their estate out of probate should seek advice well in advance of infirmity.

Various devices can transfer property upon death, but each must be used correctly. For instance, several government programs may have liens against an estate which must be satisfied before distribution. And “look-back” laws will determine the amount owed even when the deceased kept no records. Lien holders are creditors who are paid first.

The Process for Trusts

Trusts are one way to endow charities or causes. A trust can replace the need for a will. Living trusts can be a good financial planning instrument. Living trusts set aside specific assets for the beneficiary but maintain access to the assets of the trust if needed. I will draft simple trusts, but for those who wish to address tax issues and complex trusts, I confer with others who have specialized knowledge.**

While I may keep a copy of a signed will or trust for a time, I do not guarantee storage for good reason. Lawyers, like clients, are perishable. Instead, I advise the client as to safe keeping.

*There are several types of wills, and people have made video wills. Video wills are legal in Montana. But all the considerations discussed above still apply. And, care still must be taken to create a legally valid will, whether on paper or by electronic means. Storage of video or digital wills can be challenging.

** Tax avoidance and inter-generational trusts require knowledge of complex tax laws and are for trained professionals only. Do not try this at home!

Estate Planning

I associate with, or refer clients to, prudent estate planning attorneys and accountants for complex or tax avoidance estate planning. Tax laws and I.R.S. interpretations of those laws change often and with little or no notice. This year’s tax avoidance technique may be next year’s tax evasion crime. Do not “game” the system. Do not send money to high pressure internet based “experts”. Do your financial planning well in advance with the assistance of trained professionals. I gladly provide counsel to clients in estate planning, usually in concert with making wills and trusts.