Let me tell you about my Law Firm internship, the summer before I started my legal education journey. I decided that I wanted to further gain knowledge and understanding from a real-world professional. While I had little experience in the legal field, I was able to connect with Attorney Joan Reed Wilson, of Reed Wilson Case, with whom I’ve been interning for the last 12 weeks.
Reed Wilson Case (formally known as RWC, LLC, Attorneys and Counselors at Law) handles Elder Law, Estate Planning, Real Estate, and Probate & Trust Administrations, all areas in which I was extremely unfamiliar. I also assumed that these were all areas of the law that a recent college graduate would not have to worry about for at least another few decades.
It didn’t take me long to realize how very wrong I was. If you’re like me, and you have very limited knowledge of these particular areas of the law, here are a few things I’ve learned over the past few months at my Law Firm Internship, that I think everyone else should know too.
1. What Probate Really Is & Why Some Want to Avoid It
Within my first week at RWC, I had probably heard the word “probate” used more times than I had in my entire life. In fact, I didn’t really understand what exactly probate was until I was able to witness clients signing a trust.
Probate is the judicial process whereby a will is “proved” in a court of law and accepted as a valid public document that is the true last testament of the deceased, or whereby the deceased’s estate is settled according to the laws of intestacy in the state of residence of the deceased at the time of death, in the absence of a legal will.
RWC helps clients who are appointed the fiduciary (called an executor if there is a Will and an administrator if there is no Will) of an estate and guides them in following the final wishes of the deceased.
Whether someone dies with or without a Will in the State of Connecticut, it is the responsibility of the Probate Courts to appoint the fiduciary (usually a relative or friend) to handle the expenses and debts of the deceased and then distributed the assets to the appropriate beneficiaries.
The Probate Court process can be drawn-out, confusing, expensive, and filled with paperwork. Probate generally takes anywhere between nine months to a year in the State of Connecticut, and due to the nature of Probate Court Records, most of the documents regarding the deceased’s estate can be obtained by the public.
During the loss of a loved one, this complicated and costly process can be extremely difficult to navigate. But there are steps that one can take to avoid probate altogether! A few ways to avoid probate are to establish a living trust, appoint a joint owner, create “payable-on-death” accounts, and register “transfer-on-death” assets.
2. Having A Will Does Not Avoid Probate
Although foreign to the concept of probate, the notion of a Will was something I was familiar with. When I first became educated on the extensive probate process through this Law Firm Internship, I thought that it would hopefully be something I would never have to encounter because all of my loved ones have a Will. So I was shocked to learn that having a Will does not guarantee probate avoidance.
If a Will doesn’t avoid probate, what even is a Last Will and Testament?
A Will is a legal document that allows you to put your wishes in writing regarding what happens after your death by allowing you to name an executor to handle the distribution of your assets, as well as to whom the assets will go. Although it is not required, having a Will gives you the power to choose a representative of your estate when you pass, as well as naming guardians of your children, if applicable.
However, the representative you have chosen for your estate must be appointed by the Probate Court. The executor must petition the court to actually have the authorities of the executor, and since that individual is named in the Will, the request is usually granted.
While simply having a Will does not mean you will not have to deal with probate, if you’re one of the 32% of Americans that has a Will, it makes the process somewhat easier.
By not drafting a Last Will and Testament, anyone can petition the probate court to become your fiduciary, and the state laws of intestacy determine who gets your assets. One of the ways to ensure your final wishes are followed is to create a Will, but to avoid probate, a Living Trust is usually necessary.
3. The Different Types Of Trusts & The Importance Of Each Trust
One might hear the word “trust” and automatically become intimidated, yet in reality, it’s very practical and helpful for many people. Personally, I thought it was something only the wealthy needed before I began learning about the different types and uses of trusts.
Now, I am one of the 77% of American adults who believes that estate planning is important for everyone, regardless of their wealth status. A living trust, also known as a revocable trust, is an agreement in which a settlor or grantor (the individual who creates the trust) appoints a trustee to manage the assets within the trust, on behalf of the beneficiary or beneficiaries named in the trust.
This particular type of trust is effective immediately upon creation while you’re still alive, unlike a testamentary trust, which is created in the Last Will and Testament and becomes effective after death. A revocable trust allows the owner of the trust, or the settlor, to remain in control of the assets in the trust, add and remove beneficiaries, and modify the overall terms and conditions at any point.
This ability to edit the trust is perhaps one of the largest benefits of a living trust, however, it also makes way for various disadvantages. Because you will continue to have control over your own assets, they are considered your property and are not protected from your creditors, including your own long-term care expenses.
This means that the assets could be liquidated in the event of a lawsuit and all of the assets in a revocable trust are available to be spent before someone can qualify for Medicaid or Title 19.
An irrevocable trust, on the other hand, is finalized when it is signed, meaning it will remain unchanged.
The most attractive part of an irrevocable trust is that it can provide asset protection, as the assets are now owned by the trust and beneficiaries. Because of this, the assets in the trust no longer belong to the settlor and do not have to be used for the settlor’s care needs (provided the trust is drafted properly and has been in place and funded for at least five year (the “look-back period”)).
Lastly, many parents, even those whose children are young adults, may want to look into creating a children’s trust. In this process, the grantor or settlor names the trustee to manage the assets in the trust for their children, usually until they reach a certain age.
Once you have identified your trustee, you can determine the terms of your trust and how your kids will be able to gain access to the trust funds. Some common ways to administer the inheritance are through a lump sum of money, staggered distributions to your adult child, and other stipulations to your child’s access to the funds, such as pursuing education, purchasing a home, or paying for a wedding.
By creating a children’s trust, the trustee will be able to hold and manage your children’s inheritance without the supervision of the court, which eventually saves time and costs for your children.
4. A Trust Can Help You Avoid Probate & Protect Your Personal Information
While this may seem like a lot to handle, the biggest takeaway should be that a Trust can help you avoid the stressful process of probate. And, despite the differences between these trust structures, neither revocable nor irrevocable trusts are subject to probate, meaning that the assets are passed down to the beneficiaries without intervention from the probate court.
This will save time and money, and handle all of your assets at once. Additionally, this probate avoidance guarantees the privacy of the assets in the trust, as they will not go on any public records like other assets that are subject to probate. This prevents individuals who have no business with your assets from gaining information about the value of your assets.
Lastly, a trust also eases the process in the event that you become incapacitated and unable to manage your own assets. Your successor trustee will be able to step in without having to undergo probate court-appointed conservatorship.
Setting up the trust that works best for you depends on each individual situation, as there is a plethora of ways to go about it. It is best to sit down with an Estate Planning Attorney to go over your particular personal and financial situation and ensure you’re making decisions that work best for you.
Before meeting with an attorney, it would be extremely beneficial to think about the different types of trusts there are, who you would want to name as your trustee and beneficiary, the structure of your trust, and what assets you would want to fund the trust.
It is also important to note that your estate planning does not stop altogether after you sign some documents. Life happens- so in the event that your financial situation changes, you get married, divorced, start a family, or even move to a different state, it is important to keep your estate planning up-to-date.
5. Create A Power Of Attorney And Healthcare Directive ASAP
Within my first few weeks completing a Law Firm Internship at RWC, Attorney Wilson approached me about a Power of Attorney and Healthcare Directive. While I understood what these documents were and their importance, I assumed because I was 20, lived at home, and was financially dependent on my parents that they would just automatically make all of those decisions for me… right? Wrong!
Legally speaking, when someone reaches the age of majority (18), parents do not have the right to review their child’s medical records, make decisions for their child’s health care or manage the child’s bank accounts.
I was completely taken aback by this information. For years, I had gone to college in a different state, hours away from home, and my family had no legal right to review my health if I were to ever become ill. Fortunately, Attorney Wilson explained this to me and drafted a Power of Attorney and Healthcare Directive for me that same day.
I was able to sign a Healthcare Directive that stated my organ donation and life-extending medical treatment wishes, as well as giving my parents the ability to make medical decisions on my behalf in the event that I am unable to do so myself.
The Power of Attorney that I signed also allowed my family to have authority over my finances contingent upon incapacitation. Not only did signing these documents help me get organized for my future, but it also put me ahead of the game, as only 41% of Americans over the age of 55 have end-of-life health directives and just 33% have a durable power of attorney.
While it felt strange, to give my family these privileges that I was unaware they didn’t even have, it was a vital step that I took in my journey in the “adult” world.
6. You Actually Need A Lawyer For Real Estate Transactions
As an avid fan of HGTV, I was pretty sure I understood the process of buying or selling a house. Your real estate agent takes you on a tour of three properties and you put in an offer for the one that has the best price/location combination. After signing a couple of documents and putting down a few thousand
dollars, the house was yours! But upon my first few hours at RWC, I was able to be a witness in a real estate closing and I realized that the transaction was significantly more complex than HGTV made it seem. This process first begins with an interested party, the buyer, submitting a Purchase and Sales Agreement to express interest in a property.
This is the “offer”. If the seller wants to accept the “offer”, they sign the Agreement, and it becomes a contract. From this point, your real estate attorney assists with the inspection negotiations, title searches, and mortgage approval process. The buyer and the seller each have their own attorney.
The Agreement includes the closing date, usually up to 45 days after the offer has been accepted. However, this closing date often changes throughout the process, depending on if there are any conflicts along the way.
During the actual closing, you will have to sign a LOT of forms and most of them have to be signed in person. The amount of paperwork depends on the specific conditions of your transaction. For example, if you are the seller or you are a buyer who is not taking out a mortgage, you will have fewer documents to sign than someone who might be taking out one or more loans.
I’ve witnessed real estate closings that have ranged from lasting 30 to 90 minutes, depending on the circumstances of the contract. Your signature is mandatory and the date is required on most documents as well in order to ensure that you fully understand the terms of your contract.
Additionally, witnesses are present to ensure the authenticity of your signature. This process is undoubtedly tedious (keep reading and you’ll learn why), but will eventually help you achieve what could be one of the biggest and most impactful decisions in your life.
7. Be Careful How You Sign Your Name On Legal Documents
When signing legal documents, your signature should not change. This tidbit of information was not something I thought needed much clarification until I was able to actually experience firsthand the headache that resulted from having a signature that did not perfectly align with the printed name. As previously mentioned, closing on a property requires stacks of paperwork.
Between mortgage applications and warranty deeds, real estate law leaves no room for error or personal interpretation. In one instance, a client closing on a property had applied for a loan by providing the loan originator with their driver’s license, which had the client’s full name: first, middle, and last.
This resulted in the closing documents having the client’s full name (first, middle and last) on every page. While it may be obvious to most of us that it was the same person, the signature has to match everywhere.
Moral: When applying for a loan, if you want to own your home under your first and last name only or your first, last, and middle initial (and you don’t want to have signed your FULL name on multiple documents at your closing), be sure to speak up when applying for your mortgage and ensure that your loan application includes your name as you want it to read on your documents.
Although I only observed this contention in the field of real estate law, it can’t hurt to be cautious with all of your legal records.
8. An Elder Law Attorney Can Help With Long-Term Planning
When faced with the extremely emotional and stressful conversations of estate planning later in life, most people assume that they should be reaching out to their doctor for guidance. While a physician can definitely provide sound advice regarding the patient’s medical care, it is also beneficial to reach out to an elder law attorney for further assistance.
Elder law attorneys handle a wide range of legal matters by having a thorough understanding of Social Security benefits, Medicare, Medicaid, financial planning, and long-term care.
An elder law attorney will be able to evaluate one’s particular situation and provide recommendations to assist with a healthcare plan, how to pay for the needed care, through the benefits programs provided by Title 19 or other state and federal benefits, and carrying out one’s final wishes in a Will. At RWC, I was able to observe firsthand at my Law Firm Internship how essential a knowledgeable and compassionate elder law attorney can be.
There are countless reasons why an elder law attorney would be extremely valuable to you and your loved ones, so it is important to contact one, even before it might seem necessary.
If you’re like me and were completely surprised by some or all of these facts that I learned at my Law Firm Internship, don’t stress – now you have somewhere to start! Contact an Estate Planning, Real Estate, or Elder Law Attorney. Personally, I would recommend RWC, LLC Attorneys and Counselors at Law in Middletown, Connecticut. You can contact Reed Wilson Case at 860-669-1222, to schedule a consultation with Attorney Joan Wilson or Attorney Kristen Prout.