“I Know More Than I Did Before”

Incapacity and Estate Planning.

Incapacity has been discussed in some previous articles. For example, you saw a glimpse of it in the article discussing the scenario where a parent died in an accident and the other parent lived, but was temporarily incapacitated, with minor children to care for. The more common scenario is incapacity of an elder due to illness or injury.

A good illustration is a case I had almost 20 years ago. The husband, in his 70’s, was an Alzheimer’s patient.  A VA hospital with long-term care accommodations accepted him as a long-term care patient, which was a blessing for the wife, for whom the strain of caring for him at home was growing more and more serious. I want to make it clear that she would have kept him at home if the VA hospital hadn’t taken him as a patient, but it was wearing on her severely.

She wanted to move closer to the hospital where her husband was being cared for and decided to sell their house for that reason. However, she couldn’t, because he was an owner, too, and he could no longer sign any legal documents due to his condition. She retained me to petition the court for a conservatorship of him, so she could get permission to sell the house and to create an estate plan for both of them.

If they had an estate plan sooner, it would have included powers of attorney for each other, and she could have sold the house without a conservatorship, using his power of attorney in place of his signature. Keeping the court out of it would have saved the attorney fees and court costs she incurred and would have been much easier and faster.

Having powers of attorney for purposes like this one, and others, is so very important, provided the power is given upon advice of counsel, with proper safeguards, in a relationship of implicit trust. If not a spouse, the agent could be a child of the person granting the power, or perhaps two children together who must unanimously agree in order to use it.

Besides a specific transaction like this one, the power may be used for a series of actions in the process of qualifying an elder for his or her Veterans Disability Pension (also known as Veterans Aid & Attendance) to help with the cost of assisted living, or qualifying him or her for Medi-Cal to pay the cost of nursing home care, which the person couldn’t otherwise afford. With Medi-Cal paying for nursing home care, the person must still pay their “share of cost” amount, but Medi-Cal pays for the remainder at a rate lower than the self-pay rate.

The point is, many people will reach a point where they lack the legal mental capacity to negotiate for themselves and sign documents for themselves, but they won’t have to be placed under a court conservatorship if the power of attorney they created, when they were lucid and well, can be used instead. This can save a family a lot of money in attorney fees and court costs, and can also eliminate the delay associated with court proceedings.

The person granting a power of attorney must be careful giving this much power to another person, because powers of attorney are subject to abuse in the wrong hands. That’s why I have stated above that they should only be given upon advice of counsel, with proper safeguards, in a relationship of implicit trust.

There is another form of power of attorney in California called Advance Health Care Directive. It allows a person to make his or her decisions about health care, and withdrawal of care, in life-threatening or terminal illness situations, and it specifies the person or persons who will make all of the other decisions, of which there may be many.

The other important document for incapacity planning is the revocable trust, sometimes referred to as a “living trust.” That’s because it can be a good management tool for the property that it governs, because the creator of the trust has named a successor trustee to administer the property in the trust if the creator of the trust is incapacitated. By this means, the creator’s instructions prevail even the creator is no longer the trustee.

So, for example, the successor trustee for the surviving parent in the first scenario could use the money and property in the trust to support the children until the surviving parent’s recovery, even though the successor trustee is not the custodian of the children.

There are many ways in which good estate planning can make an incapacity event easier to deal with when and if the time comes. What’s most important is that the planning be done well in advance of the incapacity event.

Notice – though Mr. Cooper has many years of experience in estate planning, wills, trusts and probate, this article is not intended as legal advice, and should not be taken as such. There is no substitute for personal legal counsel by a qualified attorney licensed in your jurisdiction.

“I Know More Than I Did Before”

Common Estate Planning Mistakes.

The most common mistake people make in estate planning is to fail to do it at all. It’s still true that the most common estate plan in America is the probate code of the state in which a person resides. That’s because the probate code of your state, and related sections of other codes, say how your property will be distributed upon your death if you don’t have a will or a trust.

An example of related sections of other codes would be your state’s laws regarding multiple-party bank accounts, co-ownership of real estate and personal property, such as the laws pertaining to community vs. separate property in California, and so on.

A common misconception is that your estate might forfeit its property if you have no will or trust, but that is very rare, and it’s not what the law strives for.

Another common misconception is that your estate won’t require probate if you have a will. Small estates, will or no will, can avoid probate in California and many other states if they are less than a certain amount, typically less than $100,000.00 in California. However, a will in an estate of more than $100,000.00 over and above non-probate assets must be probated. The planning document that does avoid probate in most cases is the trust, provided the property is placed in the trust by the owner before his or her death.

Here’s a conception that’s not necessarily a misconception: you can do your own estate planning and create your own estate plan documents. It is clearly true that you can prepare your own estate plan documents. It is clearly true that there are some good references and some good software out there for this purpose. But will you get it right, and, if not, can it be fixed?

For example, you can be your own general contractor, get the proper permits, and build a beautiful new garage, but what if it’s two feet over the property line? Well, you can cut off two feet of the building, but you probably have to cut off five more, because there’s a lot-line setback regulation in most jurisdictions. In other words, you might be able to fix the problem and save the building even if it’s awfully inconvenient and the building is not quite as useful as it would have been. But, you generally can’t turn an invalid will into a valid one, and of course, the problem is usually discovered after the maker of the will is deceased and can’t sign a new one.

Of the invalid wills I’ve seen in my practice, it has always appeared that the maker of the will did not know that an unfixable mistake was being made when he or she was making the mistake. That’s because you don’t know what you don’t know, and your typewriter or your pen will not rear-up and stop you the way your horse might at the edge of a cliff.

Besides the above, two of the most common mistakes are related to the end of relationships. If you are divorcing or severing a registered domestic partnership, it would be wise to see an estate planning attorney at the beginning of the process, because you need to revoke and/or change certain documents at the start, in case you become incapacitated or die before the divorce is final. Otherwise, if living but incapacitated, the wrong person will have control of your jointly-owned property, much to your detriment, perhaps. Or, if you die during the process, the wrong person will receive your share of the property.

If the process of dissolution of the relationship is completed and no such problem occurred during the process, it would be wise to see an estate planning attorney right away, to make sure that the former spouse or partner is no longer the person who will receive property of yours if you die. Please believe me, it happens all the time, primarily due to carelessness, but not intentional carelessness – it’s another version of you don’t know what you don’t know. In most such cases it’s obvious that the person would have made the necessary change on a particular account or document if he or she had known what would happen, but he or she didn’t realize something more still needed to be done.

Notice – though Mr. Cooper has many years of experience in estate planning, wills, trusts and probate, this article is not intended as legal advice, and should not be taken as such. There is no substitute for personal legal counsel by a qualified attorney licensed in your jurisdiction.

“I Know More Than I Did Before”

Charitable Giving. 

Besides goodwill, there are great reasons for including charitable bequests in your estate plan.

First and foremost, even if it’s a small gift, it means something to your heirs and beneficiaries. It’s a clear signal from you to them that there’s a bigger picture in life, and that it’s a beautiful one you want them to see, and to take a part in. Collective responsibility derives from individual responsibility, and you have an opportunity to set the example for them one more time – the example of how life works best – giving for the benefit of others. They will follow your example.

Next, it means something to the world. You give of substance external to yourself – money or property – but it evidences something internal to yourself – the spirit of the giver. That has meaning for the recipient, of course; let’s say, for example, bread on the table. But to everyone in the chain from wheat in the field here to bread from the oven in a distant land, including the recipient, it also has another meaning, even more profound – the spirit of giving is alive in the world, and in motion, everywhere.

And finally, there is always the mundane. A gift to a certain type of irrevocable trust during your lifetime can eliminate the tax you would otherwise pay on sale of highly-appreciated property, produce a stream of income for you during your lifetime if you want, create a financial arrangement within the trust that will replace the entire value of the asset in your estate (technically outside your estate), and make for a gift to your heirs the same as the amount they would have had if you hadn’t given the gift. The mechanics of this estate planning device and others using charitable giving as their “engine,” are very interesting. People should be sure to discuss these planning devices with their estate planning attorney.

Notice – though Mr. Cooper has many years of experience in estate planning, wills, trusts and probate, this article is not intended as legal advice, and should not be taken as such. There is no substitute for personal legal counsel by a qualified attorney licensed in your jurisdiction.

“I Know More Than I Did Before”

First In My Book.

Your Children.

If you have minor children, the primary importance of estate planning is their physical care, and management of their financial resources, if you are suddenly unavailable.  Let’s say Mom and Dad are in a bad accident – one dies and the other is unconscious for three weeks and recovers very slowly thereafter.  Who has the legal right to custody of the children?

The unconscious parent does, which in practical terms means — no one.  So, when the police come to the home and find the children with the babysitter, they will most likely call CPS (Child Protective Services) and have the children taken into protective custody.  Not juvenile hall, but rather, short-term foster care until there is a court hearing, hopefully no more than a few days.

Some relatives, the ones CPS can locate quickly, will be notified, and hopefully they will tell others.  CPS may decide to release the children to a relative before court — but they are not required to do so.  Let’s say some relatives come to the hearing.  Who among them has the legal right to custody of the children?  Still, no one.  It’s up to the court what to do:  release them to someone who asks, or keep them in foster care until there’s a further hearing.

Let’s say the two sets of grandparents both want the children, and they are both sincere and distraught.  They have lawyers.  They all tell the court at the hearing what a bad idea it would be for the other set of grandparents to have the children, and they engage in mudslinging. The court decides that this spells trouble, and sees that they are alienating each other so badly that whoever “wins” will interfere with the other set of grandparents’ relationship with the children, because they are hopping mad with each other now.

Under these circumstances, the court decides on further foster care until a later hearing when CPS can present a report on what it thinks is best, maybe another ten days from now . . . .

Other relatives contact lawyers, too, and they find out that whoever gets the children will have $1,500.00 per month from Social Security based on the deceased parent’s entitlement.  Now, more people want them . . . .

What’s missing here?  What’s missing is the information on what the parents would have wanted for their children’s placement.  No estate plan documents = no one will ever know.  All the contestants will tell a different story about what the parents told them, if anything, and so it goes . . . .

Where will the children end up, and when?  You can’t really tell.

What should have happened?

Let’s say, when the police arrived, the babysitter handed them “the letter,” prepared by the parents’ attorney as part of their estate plan, with the signatures of both parents, saying, “If for any reason we are unavailable to care for our children due to illness, injury, death or other unforseen circumstances, they are to be taken to the home of our dear friends, John and Jane Doe, located at [nearby].  John and Jane are in possession of our California Guardianship Authorization and have full authority to care for our children in our absence, including access to their medical records, authority to consent to their medical treatment, and authority to establish and/or maintain their school enrollment.  A copy of the authorization is enclosed with this letter.  Our nominations for longer term guardians are the parents of one of us, Mr. and Mrs. Dell and Sunny Jones, Sam Jones’ mother and father. They have copies of our wills showing the nomination and will arrive within a few days upon notice from Mr. and Mrs. Doe . . . .”

See the difference?  It’s hard to imagine documents more precious than these, isn’t it?

Of course, the documents in the estate plan go much further, to spell out not just who the children will live with, but also who will be their financial guardians (which may be different from the “live with” guardians), and all the other things needed for raising the children, which may be as detailed as the parents want it to be.  In this case, the parent slowly recovering from serious injuries will know that everything is going just as planned, and if he or she didn’t make it for some reason, everything would still go just as planned.

Like so much of lawyering, there are contingencies and costs. Obviously, one would hope that this accident never happened and Mom and Dad were good to go as parents for the duration. And because death or incapacity of both parents is relatively unusual, the documents would be there and “the letter” would never be opened by police officers or anyone else.  So, the parents paid for their estate plan documents to be written by their attorney, but these particular documents were never used.  Was the additional cost worthwhile?

What do you think?

Notice – though Mr. Cooper has many years of experience in estate planning, wills, trusts and probate, this article is not intended as legal advice, and should not be taken as such. There is no substitute for personal legal counsel by a qualified attorney licensed in your jurisdiction.

“I Know More Than I Did Before”

Incapacity Planning – Whoops 2!!

Veterans’ Disability Pension.

My subject this time is a Veterans’ Disability Income program called, “Pension,” or “Disability Pension,” and often referred to as “Aid and Attendance.” It is another thing to consider in Incapacity Planning, and you should consider taking the time to see if you might qualify for this benefit.

It is available to qualifying veterans discharged under other than dishonorable conditions, or their spouses, including single surviving spouses. The public’s recent focus on this benefit is a result of this Pension being awarded to veteran households who are receiving care in nursing homes, assisted living facilities, or from home health aides.

You may be eligible if you or the veteran through whom you claim served 90 days or more of active duty with at least one day during a period of conflict, your countable family income is below a yearly limit set by law, your assets will not sustain you for more than a year or two, and you are permanently and totally disabled, or you are age 65 or older and are in need of assistance with one or more normal activities of daily living.

Service in combat by the veteran is not required, injury during service is not required, and retirement from military service is not required. This is a very underutilized benefit because the income eligibility ceiling is low. However, many are qualified who think they aren’t, because they are not informed that all medical expenses that are expected to recur every month are deductible from their income.

This may include the cost of an assisted living facility or paid assistance at home, and so, households earning $2,000 to $6,000 a month might still qualify if the cost of care is high enough in relation to their income. The key inquiries are countable family income, after all the legally-allowed deductions are subtracted, and the amount of non-exempt assets available.

It’s important to understand that there are ways known to competent advisors to achieve eligibility for this benefit when eligibility is not apparent, or even doubtful. Therefore, keep an open mind, and don’t assume your income or assets are too high. Seek out an attorney or other advisor who knows what the rules are, and you may be pleasantly surprised.

But, be prudent about who you consult. There are only three types of individuals who are allowed by VA to represent veterans in the preparation, presentation and prosecution of claims for benefits: accredited representatives of service organizations, recognized attorneys, and accredited agents.

Notice – though Mr. Cooper has many years of experience in estate planning, wills, trusts and probate, this article is not intended as legal advice, and should not be taken as such. There is no substitute for personal legal counsel by a qualified attorney licensed in your jurisdiction.

“I Know More Than I Did Before”

Thirteenth in a Series.

Incapacity Planning — Whoops!

In the most common scenario, the well spouse calls for an appointment with me after the unwell spouse has gone into convalescent care, which may also be referred to as a skilled nursing facility or a “nursing home.” For this article, I’ll assume the well spouse is the wife and the unwell spouse is the husband, since that’s usually the case (not always, of course). As you know from the last article, the scenario is one in which there has been little or no planning. Hence the “Whoops!” in the title.

We first orient ourselves. Is this expected to be for “the duration,” or just for awhile, such as healing after surgery? Is there money to pay privately (about $7,200.00 per month in our locale, more or less)? Is there long term care insurance? Is he a veteran who served in a period of conflict (possible VA benefits)? What are the parties’ assets (possible Medi-Cal benefits)? Are there estate plan documents of any kind (hopefully at least a durable power of attorney)? Is he a member of an Indian tribe (various possible benefits, depending on the tribe)? Are there children, and where are they? Can they help? And so on . . . .

In many cases, the matter is simple in the short term — simplest for those with the least — because in this example he is eligible for Medi-Cal. House – exempt. Car – exempt. Property used in trade or business – exempt. Money – exempt up to $109,560.00 if there is a spouse not in nursing home care, as in this example. There are several other exemptions I won’t mention here, generally smaller in amount. The well spouse submits a Medi-Cal application, and Medi-Cal starts paying the monthly bill, at a discounted rate. The well spouse gets to keep both parties’ incomes, up to a total of $2,739.00, and the remainder goes towards the cost of the husband’s care. O.K., that was simple, in this simple scenario.

However, Medi-Cal reimbursement looms in the future. If the wife receives all the couple’s property at the husband’s death, Medi-Cal reimbursement is due at the time of her death. Suppose she wants to sell or transfer the couple’s home prior to the husband’s death? How will she do so if he is incapacitated and can’t sign the deed? Or, suppose the couple has more than $109,560.00? Does all of it need to be paid towards his care at the private pay rate until all but $109,560.00 is gone?

Further, a goodly part of the Medi-Cal rules are due to change soon, with California’s adoption of the federal Deficit Reduction Act, which may be implemented later this year, or more likely in 2011, but we’re not really sure when.

And further, what I wrote above about “this simple scenario” is not really so simple. There’s a lot more to think about than I’m able to cover in a space as short as this article. Please do not think you may rely on what I’ve said above — you can’t. It is not legal advice, and you can’t treat it as legal advice. It is more like a caution, that being: please seek out something that can really help you — legal advice — and please do it now. Take the “Whoops!” out of the equation.

When you consult an attorney with estate planning and elder law experience, the attorney will need to look at all of your existing estate plan documents, consider all of your assets, and review your family circumstances with you, in order to help you plan for incapacity and its potentially devastating financial impact on your estate.

You will notice that I’ve focused “this simple scenario” on Medi-Cal eligibility. Sometimes, it’s a life-saver, especially for the average folks that make up most of clientele. But you must keep in mind that not everyone is eligible, and it is dangerously impractical to try to create eligibility on your own, such as reducing the size of your estate by gifting your property. Gifting can create a long period of ineligibility.

Any strategy for incapacity planning must be carefully considered and well thought out. There is no one-size-fits-all strategy. Do not procrastinate your estate planning. And, be sure to talk to your attorney about planning for incapacity. The younger you are when you take up the cause of estate planning for yourself and your family, the better. It’s your cause, and theirs.

Notice – though Mr. Cooper has many years of experience in estate planning, wills, trusts and probate, this article is not intended as legal advice, and should not be taken as such. There is no substitute for personal legal counsel by a qualified attorney licensed in your jurisdiction.

“I Know More Than I Did Before”

Twelfth in a Series

Incapacity Planning – Don’t Just Wait and See

This subject is often overlooked in estate planning discussions and presentations, yet it is one of the most important concerns we have to address. In some cases, it’s the most important of all. That’s because long term care is very expensive. It can consume an entire estate, besides exacting a huge toll on the physical, mental and emotional reserves of an entire family.

To get an idea of how much it will cost you personally in current dollars, answer the questions in the Federal Long Term Care Planning Tool, at  and it will give you an answer. Of course, this is merely a probability, because it derives from a government study for which the results have been averaged, based on the factors covered by the questions it asks.

Another good source of information is the pamphlet published by the California Partnership for Long Term Care, entitled Asset Protection: a Special Benefit Created for Californians. The average daily cost for nursing home care in California in 2008 was $210.00 per day, which is over $76,000.00 per year. If the cost increases at a compound rate of 5% annually, it will be double in 14 years. Of course, this is merely a probability, since the actual rate of increase in cost over time is not known.

For the average length of stay in a nursing home, estimates differ, but are generally in the range of two to three years on average. Reading articles on the internet is a good way to take a look at the various estimates of both cost and length of stay in different studies. When I answered the Federal Calculator questions, my cost number in current dollars was about $175,000.00. Based on the rate of increase in the paragraph above, that would put me at $350,000.00 when I’m 74.

I don’t endorse any particular study over another, but it’s easy to see that, no matter whose numbers you use, the numbers are big in relation to the estates of the average families that make up most of my law practice.

I’m bringing this to your attention because a good share of the estate planning I do is “crisis planning,” based on the failure to plan for incapacity. That is, a spouse or a family comes to see me when an elder has suffered an “incapacity event.” He or she has taken a serious fall, or has had a stroke, or a serious surgery, and has been transferred from the hospital to a skilled nursing facility for an indefinite stay. Or, he or she can no longer be cared for at home for other reasons, and for that reason has moved into an assisted living facility or been admitted to a nursing home.

Crisis planning is inherently problematical, because many of the options that would have been considered several years before, in the normal course of estate and elder care planning, are no longer available. It’s not that all options are forfeited, but the range of options is reduced. Don’t get me wrong, an attorney with estate planning and elder law experience can still provide invaluable assistance, but he or she will often be thinking you would have done better to come for a consultation a few years ago.

I’ll discuss crisis planning in more detail in the next installment of the series. There are approaches to these kinds of problems that may be very helpful in some cases.

Notice – though Mr. Cooper has many years of experience in estate planning, wills, trusts and probate, this article is not intended as legal advice, and should not be taken as such. There is no substitute for personal legal counsel by a qualified attorney licensed in your jurisdiction.

“I Know More Than I Did Before”

Eleventh in a Series – What about Probate?

Probate is a court supervised process for transferring a deceased person’s assets to the beneficiaries listed in his or her will. Typically, the executor named in your will starts the process after your death by filing a petition in court and seeking appointment as executor. The appointed executor then takes charge of your assets, pays your debts and, after receiving court approval, distributes the rest of your estate to your beneficiaries.

If you were to die intestate (that is, without a will or trust), a relative or other interested person could start the process. In such an instance, the court would appoint an administrator to handle your estate. Personal representative is another term used to describe both an administrator or an executor. Simpler procedures are available for transferring property to a spouse, or for handling estates in which the total assets amount to less than $100,000.

The probate process has advantages and disadvantages. The probate court is accustomed to resolving disputes about the distribution of assets fairly quickly through a process with defined rules. In addition, the probate court reviews the personal representative’s handling of each estate, which can help protect the beneficiaries’ interests.

How does this compare with trust administration? Because the lawyer’s fees and executor’s commissions in probate are based on a statutory fee schedule, a probate may cost more than the management and distribution of a comparable estate under a living trust. Time can be a factor as well. A probate proceeding generally takes longer than the administration of a living trust. Privacy may be a concern.  A probate is a public proceeding in which anyone can look at the court documents, including the will and the description and value of assets, and attend the hearings. Trusts are usually administered without court proceedings, and are therefore more private.

As part of the estate planning process, you should discuss such advantages and disadvantages with an estate planning lawyer before making a decision about whether to plan your estate based on a will or based on a trust.

Notice – though Mr. Cooper has many years of experience in estate planning, wills, trusts and probate, this article is not intended as legal advice, and should not be taken as such. There is no substitute for personal legal counsel by a qualified attorney licensed in your jurisdiction.

 

 

“I Know More Than I Did Before” Tenth in a Series

Robin Hood Returns

This is the second part of the Robin Hood article, so be sure to read the first part, which was ninth in this series.  We left off with the premise that staying out of probate court was a good idea, especially back in those days.

Social and economic change over time, including the growth of cities, lending and banking, organized companies, and education, resulted in the growth of classes of persons who were neither among the nobility nor the agrarian peasantry.  These might be artisans and craftspersons, merchants and traders, shippers, bankers, and so on, including wealthy persons who were not among the nobility – more people for whom courts of probate might be undesirable.

Imagine a person of that day asking a person trained in law (now called “lawyer” in this country), “How do I keep my estate out of probate court when I die?”  Imagine the lawyer saying, “Let me think about it, I’ll get back to you soon,” and then pondering the state of the law for awhile.

Imagine the proverbial light bulb going on in the lawyer’s mind, who then reports back to the client, saying, “Here’s your answer – don’t die! You see, if your property goes into probate when the owner dies, you may arrange for the property to be owned by someone who never dies.”

Because of developments in the law of contracts, such as the creation of companies by contractual agreements among multiple owners, a clever person or persons, such as the lawyer in this example, could see that dividing one person into three legal capacities could work, and voila, trusts were born.

To simplify — the lawyer writes a contract — we’ll call it the Joe Jones trust — in which Joe Jones as owner, agrees with Joe Jones as trustee, to hold the property in trust for the benefit of Joe Jones until his death.

Joe now holds the property in all three possible legal capacities of an individual person, those being: (1) Donor (the one who gives the property to be held in trust), (2) Trustee (the one who administers the property for the benefit of the Beneficiary during the Beneficiary’s lifetime), and (3) Beneficiary (the one entitled to all the benefits of the property, such as its use and enjoyment, and the income it produces, if any). Joe is all three under the agreement.

The provisions of the trust agreement also provide as follows: (1) when Joe Jones dies, Joe Jones, Jr., becomes the new Trustee, and (2) he administers the property thereafter for the benefit of the new Beneficiary, who just happens to be — Joe Jones, Jr., or (3) he simply gives the property to Joe Jones, Jr., himself, if the trust provides that it comes to an end when Joe Jones, Sr., dies.  Under the trust agreement, the property’s owner is changed from Joe Jones, to “Joe Jones, as Trustee of the Joe Jones Trust, or the Successor Trustee of the Joe Jones Trust,” and Joe Jones, Jr., is named as Successor Trustee.

Now, there is no need for probate. Why? Because no change of title is required after Joe Jones, Sr., dies.  And, that is because title was changed before he died — to a new owner, the Trustee of the trust — who never dies, because the trust agreement substitutes in a new trustee whenever the old trustee is gone.

It was previously necessary for the probate court to change title of the property to the new owner or owners after Joe’s death, which is how families were forced into probate. However, with the title being changed before Joe’s death, the necessity for a court to change title is eliminated. No death event = no probate (usually). The successor trustee still has a job to do, including making sure taxes are paid, producing an accounting, and distributing property, very much like the executor of a will, but generally the successor trustee is not supervised by a probate court (there are some exceptions).

The next installment of the series won’t have Robin Hood’s name on it, alas, because we’re now long past that story. We’ll miss him. Both probate laws and trust administration laws have developed side-by-side for hundreds of years since then, and both have become more complex, but you can see the foundations of both are linked to legal developments hundreds of years in the past.

Note – though Mr. Cooper has many years of experience in estate planning, wills, trusts and probate, this article is not intended as legal advice, and should not be taken as such. There is no substitute for personal legal counsel by a qualified attorney licensed in your jurisdiction.

“I Know More Than I Did Before” Ninth in a Series

Robin Hood

What does Robin Hood have to do with estate planning?  It’s all in one of the popular versions of the story, so please bear with me, it’s unlikely you’ll hear it’s relation to estate planning anywhere else.  Keep in mind, this is loosely based on a story which is loosely related to the truth – actually, no one knows whether it’s true or not, or whether such a person really existed – and the development of the legal system as I describe it below is only loosely related to actual developments.

In this version of the story, much like the Kevin Costner movie, Robin returns from a foreign crusade to find his father has been murdered and his estate forfeited.  In Robin’s absence, his father, the Earl, is accused of sorcery and satanism, and is tortured by the sheriff’s men until he confesses.  At that point, the bishop of the shire excommunicates him, resulting in forfeiture of all he owns to the Crown (represented here by the sheriff).  The sheriff then orders him executed because the crimes of which he is accused are capital offenses.  Robin returns to find that, besides the cruel injustice to his father, he has no estate and is literally penniless.  The story of Robin Hood takes off from there.  If you’re interested in the tale and its many tellings over the centuries, take a look at the Wikipedia article, which is very interesting.

The particular interest for us is the system of laws under which this took place, combined with the corruption of the system evidenced by the story.  Remember, there were no income taxes per se.  The system of government, such as it was, was supported by foreign and domestic tribute, spoils of war, piracy, and death taxes – the item of most particular interest for us being death taxes – the system of most particular interest for us being probate.

The ostensible purposes of probate were three.  First and foremost was to determine what a person owned, in order to levy the death tax against it.  If the tax was not paid within the time due, typically “a season,” the entire property of the estate was forfeited to the Crown – not just enough to pay the tax – the entire estate.  The second purpose, if the tax was paid, was to determine who the heir or heirs were, and the third purpose was to convey title of the property to the heir or heirs, whomever they may be, by the court’s order at the end of the proceeding.

The ultimate effect of this was seen by the “poor,” primarily engaged in subsistence farming, as “taking from the poor” and “giving to the rich.”  The Robin Hood story as we generally know it today is of a man who, by both guile and force, reversed the process, taking from the rich and giving to the poor.  A common part of the stories I heard as a child, and the television series I watched then, had Robin Hood stealing from the rich and giving the money to families to pay taxes so they would not lose their land the way he lost his.

Now, back to estate planning.  Obviously, as far as a family’s money and property were concerned, it would be a really good idea to stay out of probate court if at all possible, especially back in those days.  That’s pretty obvious.  The question is, how?  Logically, just as life ends with death, the answer to the question has something to do with death.  And, the answer is pretty amazing.  It will be in the next part of the series, which I will subtitle, “Robin Hood Returns.”  Be sure and watch for it.