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hey you guys my clock says 6 30 so i'm gonna get ahead and get started i'm really happy to have you guys here thank you for coming to the meeting let me just do some housekeeping stuff first let me introduce myself for you guys who haven't met me yet my name is chris hall last name h a like my funny guy i'm an attorney here at the thrash carol van way law group my specialty at the firm is i do just we're talking about tonight helping trustees get a hold of their trust setting them up and managing them uh i'm a board certified in estate planning so that's the highest level credential we can get here in texas and i'm also a certified financial planner so incidentally i can help you with your investments and my past life i did a lot of income tax returns we won't be talking about taxes a lot tonight but i can do that too so what we're doing tonight is a presentation on successor trustee school what your successor trustees should know this is the same advice i give my own clients when they hire me to help with a trust administrative items what we're gonna do is for questions go ahead and look for your chat box in your interface i've already got some sample text in the box so if you want to ask any questions that's the best way so that way i can scroll up and see your questions two we're going to be recording this presentation so that you can watch it later and refer to it or share it with other people so i want you to know if you're waiting to tell me that you're an international crime lord don't tell me right now wait until later um connie connie don't give it away i see you smiling over there okay intergalactic crime lord intergalactic clock oh my goodness connie and then finally what i'll do is i'm going to mute us until we get to the question sections and then it is game on just let's go i'm going to try to make this participatory so you can ask a lot of questions and finally as an attorney i do have to give a disclaimer this is informational and general in in nature so if you want specific advice for your specific situation please go ahead and shoot me an email i'll give my email address in the text box later at the end and you can shoot me a personal question for specific questions for your specific case no attorney client privilege here no confidentiality that said it looks like i got a bunch of happy faces here let's get started here's our overview i think you can see my laser pointer on the screen right now we're going to go over how do i know i've got a trust why do i want to use a trust how do i set it up and get it going and what do i do once i'm in charge of the trust this presentation is um once i finish it i realize it's quite long so this is gonna be part one we're gonna go as far as we can and just see where we end up please feel free to fill my chat box with a bunch of questions and i'll try to help so first question how do i know i have a trust what is a trust how do i know i'm looking at a trust aside from cheating and looking at the top of your document and seeing that it says trust the way that you know you've got a trust is that a trust is defined as a way of holding property where you've got three relationships to the property and we'll go over those you've got the grantor who contributes property to the trust you've got the trustee who holds title to the trust and then you've got the the best person the beneficiary who receives assets from the trust but so let's take a look at those people a little more specifically the grantor or depending on which attorney you ask because sometimes we use different names for the same person you'll see them called grantor trust door set lore the great tour is the person who has the assets and gives them to the trustee to hold in trust this is typically the person who's worked really hard saved a long time has got some assets they want to pass on to somebody else so they're the ones who give assets the trust and you've got some examples there at the bottom usually if they've got cash they deposit the cash into the trust checking account or if they've got real estate like scarlett here they file a deed that transfers the real estate to the trustee and i'll show you the next part who is the trustee what does the trustee do i gonna reveal a bias to you guys i usually represent trustees so to me every trustee is a superhero who's working really hard what the trustee does is he takes the assets from the grantor and he holds them for the benefit of the beneficiary his job is to take a hold of the assets maintain them pay the taxes of the trust pay the insurance of the trust and then follow the instructions that the grantor left for him in the trust document and you'll notice he's a very hard working guy because he can be sued by the beneficiaries if he doesn't follow the instructions of the trust and if they sue him and win they can try to get assets from him up to the value of the trust and sometimes even more so in my opinion when i represent trustees these are hardworking guys who are doing a lot of work and they're they have a lot of responsibility so let's go to the next person the best person the beneficiary if you have a choice of what you want to be with the trust if you want to be the beneficiary you want to be the guy that the trust document says give trust assets to this person typically when the grantor creates the trust he puts stipulations on how the beneficiary receives trust assets sometimes it's based on age 21 give him fifty thousand dollars 25 given fifty thousand dollars it could be for a specific purpose college first house first marriage starting a business anything the grantor wants to put in the trust document or sometimes you see language with a standard like you've got there health education maintenance and support and then finally and we'll cover that later in some other examples and then finally the beneficiary can demand a trust accounting from the beneficiary what if the trustee is corrupt what if he's evil oh someone's let me admit someone to our meeting that's why i'm looking over here i've got two screens admit sometimes you've got a trustee who's untrustworthy so you could sue them and say hey you're mismanaging the trust assets so the beneficiary can really hold the trustee's feet to the fire so i know there's a lot of talking for me let me give you some examples and see how this plays out trust example number one we've got anakin anakin says hey ben please hold my lightsaber for my son luke until he is age 18. so we've got three people here we've got anakin we've got ben and we've got luke each of them has a role one of them is the grantor one of them is the trustee and one of them is the beneficiary so this is your part i'm going to ask you this question based on what we know about trust now what is anakin grantor i have one vote for grantor i i see i see at least four people saying grantor anyone else in the peanut gallery [Music] the answer is green tour and here's how you know anakin is the person contributing the asset in this case he's saying hey i want you to hold this asset for somebody else what is ben what is ben's role in this trust trustee you got it you got it ben is the trustee because what's what is he doing he's holding the asset for the benefit of luke right so by process of elimination luke is the beneficiary here okay let me get let me give you guys another example trust example number two father hey wife use this money to provide for my daughter's health and education for her lifetime there is father there is wife and there is daughter i think you guys you guys were so fast at the last one i think you guys already know the answers here yeah what is father grantor yes very good what is wife trustee trust me there you guys are you guys are crushing it you guys are crushing it and daughter by process of elimination is the beneficiary hey if you guys haven't done so already we've got a question in chat let me go take a look at it with you guys this is from ginger to everybody and remember if you want to ask a personal question i'm going to give you my email address at the bottom at the bottom of the meeting so you can email me questions if you like are there limits on the type on the types of trust that can be established can the trust establish eccentric limits of any variety imaginable oh ginger i like that question because those are the kind of questions that keep me employed yes when you write a trust because it's your stuff right i'm assuming it's from the point of view of the grantor at least here in texas there are some restrictions such as a dynasty trust restriction that's outside the scope of this presentation but you can really what we call them is from beyond the grave kind of controls where you can set really specific limitations um i think the litigators have seen them have told us about the most interesting ones such as you cannot you get fifty thousand dollars if you graduate from college with a 3.7 gpa in a science degree you can make it really specific um so i hope that helped ginger i'm going to keep on going so philosophical question why use a trust now that we know what a trust is it's a way to hold property why do you want to use a trust if you open up the wall street journal or the newspaper you will hear about people using trust in all sorts of creative and inventive ways for the purposes of estate planning what we're doing here we use them for three major purposes that you've got right there at the bottom avoiding the cost and expense of a probate administration when somebody dies protecting the privacy of your assets when you die and then last one and i think this is this is the champion that often gets overlooked is with a trust you can create continuity of management so if your first ball player dies there is a backup that can immediately step in and say all right put me in the game coach i can manage these assets according to the trust so let's look at each of those three in more detail number one probate avoidance so remember most that when when you die this is what this first bullet here is talking about right here the general rule is that when you die and you have asset in your sole name it doesn't say co-owner it doesn't say transfer on debt it doesn't say pay on debt it just says fred smith that's it if you die with an acid in your individual name the general rule is that that asset will be frozen when you die once the custodian finds out that you are deceased i'll use the example of a checking account you have an account that is solely in your name it has no transfer on death no pay on death instructions it's not co-owned with anybody else once the bank finds out that you're deceased they're gonna freeze that account because from the bank's point of view there's one authorized signer on that account right they're only supposed to pay it to fred so once they find out fred is deceased they go there are no more authorized signers on this account we shouldn't pay it to anybody until we see a judge's signature saying this person has legal authority as determined by a judge to access that account otherwise the bank is going to say that money is not coming out contrast you have a trust you have the account properly set up in the name of your trust before you die if you die and you're the grantor you're the person who made the trust and you die and your account is in the name of your trust when the bank finds out that you are deceased they'll say okay well there's a backup trustee on this trust document that backup trustee shows up at the bank with your death certificate and says hey look the original trustee is deceased but if you look at the trust document i'm the backup trustee here's my driver's license to prove that i'm that person the bank will say okay we verified you are who you say you are you are named as the backup trustee and the trust as long as you just fill out some paperwork we will make you the new signer according to what the trust says you do not have to spend two months and four thousand dollars going through the probate court process to get a judge's signature you just prove that you're the backup trustee and now you can sign for that trust checking account okay you guys don't look lost in the in the in the video yet i'll give you an example probate example number one with trust sue ellen and j.r buy a rental property together as husband and wife in their joint names they're here in texas and it's community property because when you buy property as as a married couple it defaults it defaults to community property jr dies very suddenly mysteriously so sue ellen is the surviving spouse can she sign for the rental property after her husband's death what do you guys think i'm gonna unmute you guys by the way so that you can what do you guys think i know this one's harder than the last one saying no i've got one no one no i think that the title to the property would have to be changed to her name only and then she could i've got a conditional yes from al i'm gonna keep you guys in suspense i can see some of you thinking about it okay i'll i'll tell you this is kind of a mean question in texas in this case a married couple bought property as husband and wife and so it's their defaults to their community property so sue allen owns half jr owns half right so if jr dies and remember this house is in their individual names right joint names j.r dies sue allen only owns half this house half this rental property so if she tries to sell the house this rental property a title company is going to get involved and the title company is going to check the deed records and say hey the ownership of this house is 50 percent jr 50 sue ellen sue i see you here you can sign for your half of the house where's jr and she's gonna say jr is deceased and the title company is gonna say okay um so you need to show us a judge's signature before you can sign for jr's half of the house we need to see a judge's signature saying someone has authority to sign for jr's half of the house so in this case you had no trust you died with property so jr's half of the house got frozen let me give you a counter example with a trust probate example number two jr creates a trust checking account so it's a valid trust checking account you can say it's properly set up it's no problem he sets it up his trust says the current trustee of my trust is me jr and the successor trustee the backup trustee is sue ellen jr it happened again you guys jr dies again mysteriously is probate necessary do we need a judge's signature who can sign for the trust account now that jr is deceased sue ellen with a death certificate i've got one answer from al sue ellen with the death certificate i'll tell you what al is right al is very i've worked with al before he's very organized he's very good at this so you're right al exactly we've got a trust document here right and we've got an account that is in the name of the trust so it's controlled by the trust document so the original trustee dies jr dies okay that's normal trustees eventually die but the trust document says i've got a backup trustee my successor trustee is sue ellen right so if sue allen just like al said if sue allen shows up with a death certificate he says look my husband is deceased here's my driver's license i am in fact the sioux album that's described in the trust document the bank verifies her identity it says yep okay looks good to me you'll probably just need to sign some paperwork but once we have gone through that paperwork we will make you the signer for this trust account because that's what the trust document tells us to do you don't need to judge a signature because you've got a valid trust you saved four thousand dollars and two months at least of going through the court process by having this trust so that's a nice benefit there um i confess i also do probate administration so i'm giving you advice that makes me poorer just so you know this is the same advice i give my own mom and i like my mom so two probate examples there let's talk about another reason to have a trust another reason to have a trust is that a trust helps keep your assets private if you if you you are or you are in a profession where a lot of you get sued a lot doctors for example i don't know what it is but litigation attorneys they look at a doctor and they just see dollar signs after you've been sued once you don't want to get sued again and one of the ways that you do that is you keep your you try to keep your asset information from becoming public record but let's look at this first set of bullets right here usually when you have assets that are not in the name of your trust and you pass away those assets become part of the public record when your estate goes through the probate process after you die your executor is required to publish an inventory of your assets so that's real estate that's bank accounts that's cars that boats that's business interest that's all supposed to go in the public inventory so any really nosy kind of person can find it the other thing about dying without a trust is that your will becomes a public document so i'll tell you right now if you go to google and you put in travis county probate court records you can search by name of a deceased person and if they went through the probate court process you can find their will it's right there as a pdf and if they've done an inventory you can see the inventory too so one of the benefits of the trust is that you've got no public inventory if you set up the trust correctly you don't go through the probate court process so there's no there's no inventory to show the trust document is typically not made public it's not typically shown on the travis county uh public records and lastly the trustee does not have a duty to be showing the trust to a bunch of people in fact the trustee is going to try to keep the trust away from people as much as he possibly can i'm looking over on my other screen i'm seeing i've got some questions in chat i'm going to take a look at those uh oh al um i'll handle the beneficiary designation question later you can shoot me an email on that one um hannah does every probate have an inventory that's a good question hannah the general rule is that when you probate a will and you go through the state administration process because you need a judge's signature right this is when you need a judge's signature to access a frozen account your executors required to make a list of your assets valued as of the date of your death and file it with the core because that the texas estates code says point blank you need to do an inventory there are ways around it um there are ways to get around it you can do an affidavit in lieu of inventory under certain circumstances but you still got to do an inventory and you still got to get that inventory prepared so it's possible that someone can get a hold of it good question hannah i've got another question from chris wilson to everyone for a single person should the children be on the house deed chris i'm not sure is this a deed to the kids after you're deceased is this a deed of the house to the trust i'll let you i'll let you answer that in the track and i'll come back so now that we know that trust assets are mostly private mostly private let's look at some examples you guys okay example time keeping trust assets private gus gum shoes own certain assets at death which assets are public if he dies which of these assets are public if he dies let's go to this first one gus gumshoes dies with a checking account in his sole name and he dies is this checking account gonna show up on a public inventory when he dies what do you guys think yes yes yeah you guys are exactly right it's exactly what we talked about right you've got an account that has to go through the probate court process when he dies because it's not transfer on death it's not pay on debt it's not in a trust so it gets frozen and you go through the probate court process to get a judge's signature to access that account that executor is going to have to do an inventory and that executor has to disclose the checking account value on the public inventory okay same gus gum shoes he all he still dies but he's got a checking account held in the name of his trust when he dies so the checking account is in the name of his trust when he dies is this trust checking account public information when he dies no no connie i'm seeing you shake your head now you're exactly right exactly the difference here is that we put the account in a trust after he's hanging out that's good i see you saying no he put the trust account he put the checking account in a trust before he died assuming there is a backup trustee and his trust is set up properly the backup trustee just shows up with the death certificate proves typically with the driver's license that he's the backup trustee and then the bank says all the paperwork checks out we'll need you to sign some forms but otherwise we're gonna do what the trust told us to do you're the backup trustee you're the signer now we're not gonna make you do a public inventory no problem very good two for two you guys so next one gus gump shoes he still dies he has real estate in his name he's got real estate in his name now that he's deceased he's that real estate public information yes yes i'm seeing four head nods on the screen i love it you guys yes exactly hannah you're exactly right yes it's just like the original checking account right if it's real estate in his sole name it's not in a trust it doesn't have a transfer of death deed it's just in his soul name you know what when they go through the probate court process to get a hold of that real estate it's going to show up on the inventory it's schedule a real estate line item number one here's the value of this thing so that's public information here's the last one right here is the last iteration here gus gum shoes owns real estate in the name of his valid trust when he dies is this going to be public information when he dies this is a trick question this is really mean this is a trick question i connie i see you smiling and nodding your head because the you're exactly right the answer is kind of yes kind of no it's no in the sense that because we've got a valid trust and the real estate was validly moved into the trust before gus died there's not going to be a public inventory saying hey gus owned this real estate when he died and here's what it's worth but remember real estate has public records like real estate taxes so if you or one of your friends is in a case where you really want to keep your real estate holdings private that's where you get into more uh more sophisticated asset protection strategies maybe using llc's to hide the ownership of just really nasty mean people who just want to sue you uh so that was really good connie i saw you nodding your head but yes no not quite very good so we covered two big reasons why you want to trust we covered avoiding probate that's at least four thousand dollars in two months we covered keeping trust assets private especially if you're someone who p people like to sue because they think you've got a lot of money and third we're gonna go to the last one and i think this is the unsung hero of a trust is continuity of management continuity of management especially if you have a lot of assets you've got you've got an investment account you've got rental properties you've got a house if you have a trust that is properly established your backup trustee if he knows where the assets are he just shows up with a death certificate and says hey i'm the backup trustee here's my driver's license make me the signer he takes over and starts paying the bills pretty quickly that's what we want right we don't want uh just because you pass away that's not it's okay you named a backup trustee that backup trustee shows up proves that he's the backup trustee and then says all right i'm ready to start paying bills taking care of this stuff remember what we talked about before if you've got assets in your sole name when you die typically those assets get frozen typically you got to have a judge's signature to access those assets after you die that could be a two month process three months process with kovid four thousand dollars in court fees and attorneys fees so a trust one of the big unsung reasons to get a trust is really your backup trustee can get a hold of the assets and start doing what you want them to do very quickly compared to going through the probate court process to get a judge's signature hey you guys we covered the three big reasons three of the common big reasons to get a trust if you guys want get a stretch a little bit get a get a drink or something we're moving on to the next section i'm very happy to see you guys on the screen not falling asleep just yet you won't hurt my feelings i love this stuff so let's get to some mechanics now how do i set up a trust how do i make a trust and make it start working now that we know what a trust is and one of the reasons to make a trust first we strongly recommend a written document if you dig around forgive me if you're if you're if you if you really love this stuff and you dig around in the texas trust code for a little bit the texas legislature contemplates verbal trusts but we really do not recommend them it's just a minefield because there's no way to it's very difficult to prove the trust exists and to enforce it and then you have vague memories written document is the way to go and then once you've got a trust document once you've created a trust document you need to put assets into the trust otherwise your trust is broke and it doesn't do anything so you've got some examples here if you got real estate you file a d to put that real estate into the name of your trust if you've got normal non-retirement accounts like checky accounts savings accounts investment accounts you usually use a certificate of trust which is a little summary of the trust an instruction letter usually your attorney prepares both of these things and then you give those to the bank and they say okay we'll open up the trust checking account and we'll put whatever you want us to put into that trust account and then the last one is and this is the tricky one retirement accounts life insurance and annuities typically are controlled by beneficiary designations so you typically want to do a beneficiary designation that says i want you to take this retirement account and distribute it in a way that is consistent with my trust okay you guys i know that was a lot thanks for hanging in there with me let's do some examples okay let's do some examples i hope these guys look a little familiar to you we got the same situation setting up a trust in example one anakin says to ben please hold my lightsaber for my son luke until he's 18. is this an enforceable trust baby [Laughter] yes that is a very laurely answer whoever said that maybe that's a very good lawyer's answer the other one is it depends isn't that infuriating but i'll tell you what it depends on even though if you get a good litigator you might be able to argue that this verbal trust is enforceable i would not bet money on this i would not hang my hat on this because imagine all the things that can go wrong ben could say anakin gave it to me as a gift to me it's not for luke he gave it to me and possession is 9 10 to the law too bad so sad and then you've got an arguing contest luke says this ben says this anakin might be dead so you have all sorts of evidentiary problems so although theoretically this might be enforceable dollars to donuts if i were advising my own mom and i like my mom none of this verbal trust business we gonna do a trust we're gonna get it in writing that's the way to do it i like that that was a good answer whoever said that setting up a trust number two we got scarlett o'hara again okay assume we've got a valid trust okay so there's no question this is a valid trust i leave my plantation tara to my daughter scarlett for her lifetime with money sufficient for its upkeep you guys i'm gonna tell you this is a really nice grantor whoever this guy is i like him a lot garland should like him a lot too she shouldn't run off with this guy right oh but the grantor's will says something different the grand tourist will says i leave tara the plantation to this guy rat who's rhett who's this red guy father never deeds the terra plantation into the trust he doesn't follow a d it belongs to him when he dies father dies who gets the terra plantation and why i see a smirk from you connie you know something is fishy going on here al i see you thinking about it i like that i like that i'm gonna hold you guys in suspense for a few more seconds seems like a valid will would exceed the trust i mean excuse me the valid trust would exceed the will al thank you for being brave enough to submit an answer i really appreciate that i deliberately made this question kind of hard right because i said we've got a valid trust so that kind of leans towards the trust right but we've also got a valid will right here is the kicker here here is why setting up the trust properly is so important the kicker here is that the trust does not own the plantation right we never moved the plantation into the name of the trust okay the way that the title company is going to think about it is they're going to say we don't care about your intention we care about what the documents say because it's a it's a valid deed that transfers title to real estate in this case if if the real estate had been in the name of the trust the trust could control it but look what we said here father never deeded the plantation into the trust the trust cannot control an asset it does not hold right we never deeded the plantation into the trust so when you die and you own an asset in your individual name the trust doesn't help you because you never gave it to the trust so it's the will that controls the plantation goes to red oh shucks ginger i just look if you look in the chat ginger's question is fantastic are we assuming we're in a year that allows women's whole property okay high five to you on that one ginger i acknowledge i might i might be getting the time period wrong on this one that's a great question okay very good you guys very good all right so now that we've talked about the importance of setting up your trust properly you've got to trust it's in writing and you moved assets into the name of the trust by deed by cash with trust checking accounts very important because you know your trust can't control assets it doesn't own you need to move your assets into your trust or make them consistent with your trust now that we've got that another issue for your trust when you're setting it up selecting your trustee uh typically what you want to do is choose someone who is very responsible who is good with money good with paperwork and good with communicating with beneficiaries because the trustee is the one who's holding this money right you don't want someone who's just gonna run off with it and just blow it in vegas i add a note here for a lot of people what they do is they choose a close family member or a friend and that's really good because usually you're leaving money to family members so that makes sense you've got a responsible family member use them that's great i mentioned an institutional trustee right here like a bank sometimes you really do want to bring in a professional trustee like a bank that does this for a living because sometimes you've got cases where you've got very complicated assets that require a lot of work some people have big ranches or like gas interests uh and those things can be a lot of work to manage so sometimes it's just better to let a professional do that or sometimes you've got um how shall we say a difficult uh family situation where the beneficiaries are fighting each other all the time so sometimes it's nice to have an institutional bank trustee to just be in the middle and let them yell at the trustee let them yell at the bank and not each other so that's selecting your trustees right there so now that we know about setting up your trust put assets into the trust and then choose a trustee the next question becomes all right you guys this is a very sad topic because most my most of the time when you're writing a trust the grand tour is your client so when the trust when does the successor trustee die it's usually when the original trustee dies becomes disabled or resigns so that's when you walk off to the sunset and the new trustee takes over so that's typically what triggers old trusty steps aside new trustee shows up so now that we've got a new trustee set setting up taking over what does that trustee need to do what does the successor trustee need to do you gotta find the trust assets you guys because as trustee you are responsible for managing those assets so you gotta go find them and get them the trust typically has some bills to pay you know if you've got real estate in there you've got insurance you might have a mortgage you got real estate taxes to pay you got to pay those things the backup the successor trustee needs to talk to the beneficiaries and say hey look you might have heard through the grapevine that you're a beneficiary i'm gonna send you a copy of the trust and here's what the trust tells me to do so i'm not coming out of left field here i'll tell you what i'm going to do i'm going to do it i'm going to remind you exactly how i'm going to do it and then finally the trust document will tell the trustee hey you need to make some distributions okay so that's why these two bullets are together because the trustee needs to talk to the beneficiary tell them hey here's what you're entitled to and here's how i'm gonna get it to you okay so we talked about a successor trustee to do list now let's walk through that specific process let's start with the easy one getting custody of trust assets typically once you've found the trust assets it's not too hard to get a custody of them typically what you'll do is you'll hire an attorney who will help you prepare a trust certificate and a letter of instruction that tells the bank hey here is a summary of the trust you can check your own records you'll see the same thing and here is a letter of instruction telling you i'm the backup trustee make me the signer usually this is not too hard because once you know where the assets are you can typically get signing authority for them it's not too hard with real estate typically if you've got a tenant you tell them what's going on there are other people involved like the insurance company and updating the address for the property taxes but usually once you know where the assets are it's easy to get custody of them as the backup trustee that's the whole point of doing a trust so i gave you the easy one first getting custody is the easy part so what's the hard part the hard part is finding the accounts the hard part is because imagine if you're the grantor it's your trust you know where everything is that's no problem but if you are deceased how is your backup trustee gonna know where everything is how is he gonna know where your assets are so i'm gonna pose the question to you imagine you are the backup trustee for a trust you're the successor trustee how are you going to find the checking and savings accounts how are you going to find the investment accounts should be in a letter of instruction i got letter of instruction al i see you thinking about it i like this i see a smile on your face yeah take a look at my spreadsheet that shows the beneficiaries and the net worth of this state perfect so al has already jumped three steps ahead he's way ahead of the curve on this one in a perfect world the grantor has left a balance sheet of the trust assets for the backup trustee they said i know you don't know where the assets are so i'm going to tell you i'm going to leave a sheet of paper that tells you some people build a formal balance sheet with all the accounts listed out some people leave all the monthly statements some people leave business cards right here's the business card from my banker here's the business card for my insurance guy um here is the monthly statement for my rental properties right in a perfect world it's just like al said your grantor is very very kind and leaves a paper trail for you if you don't have the benefit of a paper trail here are the common steps you use to find the assets a ginger treasure hunt of clues yeah that's that's not too far from the truth if you look at chat ginger said treasure hunt of clues typically what you do is your first resort is you try to get into that person's mail and email account so you just start opening up the mail and you start saying is she getting is she getting statements from bank of america is she getting statements from charles schwab is she getting real estate bills is she getting insurance bills the next common thing that you look at is the income tax return the irs form 1040. if you look on schedule b b like bravo schedule b lists the interest and the dividends that the grantor is receiving typically that gives you a place to start looking for accounts if you're really lucky the cpa will still have the irs form 1099s and the irs form 1099s often have account numbers on them so that's very helpful um and then the last thing and this is the hail mary right here is you file a credit report you ask you request a credit report for the deceased person so that's experian equifax and transunion and if you can get a credit report from those guys they typically list every account they know about in the name of the grantor and you can find out if those accounts are still open or closed so ginger i mean you you're basically right if if the grantor did not leave you any information you're hunting you're really just hunting i have seen people go through houses where the the paperwork is stacked one desk after another and those those successor trustees there are some hard-working people to go through that paperwork and try to figure out what's in the trust all right you guys oh how do i my mouse is there we go okay next next slide so now that your trusty has found the asset i never want to be a trustee i'll tell you what i'll tell you what so i'm taking a law school class my very first wills and trust class um and you want to know what the professor tells us you know what he wants to tell us all first-year law students you want to know what being trustee is it's not an honor it's not a right it is a job no joke it is a lot of work so that's why we made we made such a big fuss earlier that when you choose your trustee you want someone who's really good with paperwork and really organized hey here's another unglamorous job of your trustee i'm sorry clive i know you're listening you know what you gotta do when you're trustee you gotta pay the bills the trust assets have bills there's a tax return there's insurance there's utilities um you gotta pay those bills so let me give you some examples because i know i've been yacking a lot let me give you some examples and bring you guys back in example number one for paying trust bills trustee and this is a valid trust so the trustee is running things now right the trustee fails to pay for insurance on a house owned by the trust the house is destroyed by a tornado [Laughter] my ghost comes back to haunt him so a a cow flies through the house and destroys it do the beneficiaries have a claim against the trustee can they sue the trustee why or why not any brave souls they failed to do what the trust instructed them to do you hear that from connie they failed to do what the trust told them to do anybody i see some furrowed brows thinking about it hard right now i said they do have a claim [Music] hmm okay i'm going to give you a little more suspense just a little more okay my answer i designed it this way to kind of lean against the trustee is that the trustee by default has a duty to preserve the value of the assets typically when you own real estate you typically own property casualty insurance for things like hail flooding tornadoes fire i think the beneficiaries have a pretty good claim against the trustee in most cases to say if you knew there was real estate and you didn't pay for insurance on that real estate you may not have been the cause of the house getting destroyed but you were negligent in not buying insurance on the house so i don't know how much they would win uh that kind of comes up in litigation but as trustee you never want to be in this scenario you never want to put yourself in this scenario if you've got valuable assets you want to pay insurance on them to protect them hey you guys you guys you guys i love to see you guys we're kind of coming up in the last five minutes so i'm going to do one more slide because it's the last idea with this and then we'll do some questions thanks for hanging in there with me i'm glad you guys are here example number two for paying trust spills we got a trust we got a valid trust the trustee decides you know what i'm not going to pay the trust income tax bill i'm not going to pay it i don't feel like paying it instead he distributes the trust assets all the trust assets to the trust sole beneficiary mean the trust told them to do it right there's one beneficiary and he paid the trust assets to that one beneficiary if you know something about uncle sam is that he likes to get paid he may not be the fastest guy at the wheel but he's gonna get paid can the irs sue the trustee can the irs sue the beneficiary why or why not this is a mean question i i can see this is a mean question what does your gut tell you regardless of whether you like the answer what does your gut tell you beneficiary has to pay them the one answer for the beneficiary is going to pay the irs consumed the beneficiary the irs is going to sue the beneficiary any other brave souls because one way or another the beneficiary is responsible for the tax hmm you see that one comment in chat both get sued both get sued you guys the irs can sue both of them if it wants to because the trustee is personally liable for the the debts of the trust up to the value of the trust he had the money to pay the trust bills right he had it but he gave it to the beneficiary just because he gave it to the beneficiary does not absolve him of the liability for the taxes so irs could come after the trustee or it could argue you know what beneficiary your right to that distribution was subject to the taxes so we can come after you for it too we'll see whoever we want so ah chris you see he's coming in chat more money for the lawyers oh joy hey i'm on your team you guys i'm warning you about this so there you see in this case trustee you want to pay those bills pay him on time pay him early if you have to you guys you made it for through successive trustee school part one i'm so glad you guys made it do you guys have any questions i'll stay a little late for you guys if you need to go please feel free to go um i've got one question how many parts are left and when are they scheduled let's see we got through we went a lot farther than i thought we would we got to slide 27 of 38. we might have one or two more sec sections we'll shoot out an email letting you guys know when the next sections are coming out so you'll know i've got a question in chat from chris wilson to everyone llc you mentioned it before when is it appropriate to use an llc chris that is a very good question because oftentimes when you raise asset protection issues llcs are one of our first lines of defenses against getting sued what i'm going to do is tell you that that's outside i confess that's outside the scope of this presentation but we've got two three really good attorneys here who do llc work if you shoot me an email i can pass you on to them and get you some really good advice from them i'm going to put my email address here at the bottom okay i got another question can i have two co-trustees that's two co-trustees yes you definitely can if you're the grantor you can do you can construct your trust any way you like a lot of times our grantors say you know what i got two kids that i really like and i trust them both equally and they're both good with money in that case you can definitely have them as co-trustees the thing about co-trustees is you need a voting mechanism so typically if you've got co-trustees you've got two of them they both have to agree on everything i got another question how can we get access to the recording that's a great question so at some point after this meeting i think allison or megan is going to shoot at an email with a link to our youtube channel when we've got this posted so you can watch the recording on youtube i've got another question are the co-trustees equally personally liable for the trust i think you're gonna i think you know what i'm about to say and it's not going to be a happy answer the default rule without additional facts is yes the code trustees are both liable for the actions of the trust yeah being a trustee is no picnic no picnic you want tough strong people as your trustees ah i got another email i got another question from chris i missed the first 10 minutes shame on you chris did you discuss the trust is it the same thing as a living trust or a revocable living trust that's a good question chris typically the type of trust we've been using as the example here has been a generic trust but it fits into this mold the revocable living trust which is a trust that you as the grantor create while you're living and you have complete access to the trust you can do whatever you want with the trust while you're alive and then when you die that's when the successor trustee shows up and says okay now i've got to get custody of the assets and do what the trust tells me to do excuse me if she knows if she knows okay you guys any more questions i'll stay i'll stick around for just a little longer looking around no questions no questions some questions slow typers okay you guys i think that's gonna wrap it up for tonight i'm really glad to have had you guys uh for successive trustee school part number one especially those of you guys brave enough to throw out some answers i really appreciate that we will shoot out another email when successor trustee school part two comes out and uh a secret between you and me we are we're gonna be publishing um a book a trusty successor trustee book at some point in the future that we'll let you guys know about when it's ready to come out we're really looking forward to getting that out to you guys otherwise i'm really glad to have you guys here i've got my email address at the bottom of the text box chris at tcvlaw.com feel free to shoot me any questions you've got or any questions you didn't want to ask during the slideshow otherwise it's great having you guys i hope to see you guys in the next one thank you guys i'm going to close it out we really appreciate your time thank you thank you you