Trust Titling

Titling, titling, titling….

As with real estate it’s location, location, location with trusts, it’s titling, titling and TITLING!  What do I mean?  Well, there are several issues that can arise with trust titling errors which can cause big headaches for you and/or your loved ones.

The most common is a slightly different trust name.  So, you have a trust titled the “John Doe 2010 Revocable Trust.”  You fund the trust yourself, or use a sloppy attorney, and the property is deeded to the “John Doe Revocable trust.”  Clearly it’s the same trust, right?  Well, how do you know?  More importantly, how does the title company know?  See, a title company only has the recorded deeds and the trust document that you (or more likely a later trustee) provide them. If the documents have a different name they have no way to know which John Doe trust the property was recorded into. If the trust settlor is still alive then can easily fix this error. If they have died it can be a headache to fix.  The lesson here is to be very careful when doing your trust funding documents to make sure that the titling matches your trust EXACTLY!

The second issue I see a lot is inadequate sub-trust funding. In fact, just this morning I was reviewing some documents which gave me the idea for this post.  In the example today, husband and wife created the “Doe Family Trust.”  When Mr. Doe died two sub trusts were created: “Doe Family Trust – Fund A” and “Doe Family Trust – Fund B.”  The main trust document provides a certain order of successor trustees for Fund A and a different order of trustees for Fund B.  However, there are NO successor trustees listed for the main Doe Family Trust.  Thus, what happens if there is  a bank account out there in the name of the “Doe Family Trust” without specifying Fund A or Fund B.  Who should the back-up trustee be?   Fund A has her relatives and Fund B has his relatives.  Arguably the trust is still revocable as the wife is still alive and thus we could prepare a trust amendment to clarify that the successor trustee of the Doe Family Trust is Jane Doe’s daughter Jill.  However, what if Jane was incapacitated or even dead, then what?  Again, it’s all about accuracy with trust funding!

The failure to be accurate in your trust funding can create a trip to the probate Court!

Please use a careful attorney to create AND FUND your trust. If that fails, go to an experienced attorney to clean up the mess!

As always contact us if you need an experienced estate planning and trust attorney.


Timeshares and Trusts

I was walking down the streets of Waikiki last week and it got me thinking about timeshares.  You really can’t help it when in a place where I worry that everything is a come-on for a timeshare tour.  We actually were staying over on the west side of Oahu at the Marriott Ko Olina timeshare.  What a nice place.  I highly recommend it. In particular it’s good if you have young kids.  Anyway, being inundated with timeshares got me thinking about something… how many people fail to get their timeshares into their trusts? A timeshare, often, is a deeded piece of real estate. Like any other deeded piece of real estate it should be properly titled in your trust.

Let’s start with the timeshare purchase.  You usually buy the timeshare on vacation at some great place; Hawaii, Orlando, Las Vegas, Colorado, etc…. You are intoxicated… be-it on booze, the sun, life or some combination of them.  For me the sun of Hawaii was all I needed to feel GREAT!

So, you are high on life, walking down the beach, and they get you to go to the sales presentation.  Once at the sales presentation you receive the best deal they have ever offered… but it’s only valid TODAY! You have to buy today or the deal for the free luau, 5 million Marriott points and a new toaster is gone.  So, you sign on the dotted line!  Hey, you tell yourself, “it’s got granite counters… and all those Marriott points….”

The fact that you have a living trust is the furthest thing from your mind at that moment. Again, you are drunk on the sun (or other) and life is too good to be thinking about your living trust.  Plus, you have a timeshare salesmen offering you the deal of a lifetime and breathing down your neck… or maybe he brings in his “manager” to give you an even better deal!?  You thus purchase your new timeshare in you and your spouse’s name as joint tenants with no mention of your trust.  Sound familiar?

Then you both die. Sorry to be so blunt but I need to get to the punchline.

Transferring title on timeshares, after death, can be a headache. In particular, places like Hawaii have laws which can create many thousands of dollars of legal fees.  It is compounded if you are a resident of another state, like California, and in some cases could create a multi-state probate!

I happen to work with an Hawaiian attorney, Jerry Garcia by name (yes, really) who is very efficient at doing after death transfers of Hawaii properties. He also will deed properties into your trust while you are alive for a very reasonable fee. However, between his legal fees, the court costs, the public records costs, the title company costs, and whatever else may be required it can cost THOUSANDS!

With all this in mind you should make sure your timeshares are properly titled in your trust. If you don’t already own one but have one too many mai tai’s next time you are in Hawaii make sure you buy your timeshare in the name of your trust. If you have had a death in the family and a timeshare needs to be transferred give us a call to help straighten it out!

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10.0John Bernard Palley
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