Loving Trusts...without a lawyer?

The term "living trust" is pretty common and has been the subject of marketing efforts for estate planning by a wide array of folks, many, if not most of them, non-attorneys. These are trust mills. They will often market a trust which is generic and call it a "Loving Trust." Now, it may have been originally prepared by an attorney, but there's no guarantee of that. There will be an appointment set up. Thereafter, an individual who is not a lawyer, will come to the home, explain the trust and why it is needed. He or she will collect the advance fee, and then leaves with the information he or she has collected. The documents will be prepared, and soon thereafter, the representative will bring the  documents to the home for the signatures of the clients. 

Sadly, these documents are often bloated, and are way too complicated for the client to begin to comprehend. I once had a client come into my office and angrily toss a 3-ring binder onto my desk and say, "I have no idea what this means! Can you help me understand it or get rid of it?" I had not prepared the trust. It came from one of the trust mills in a nearby state.

Many of these trust mills operate outside the boundaries of the law. Far too many of them are not licensed to practice law. If you are ever confronted with someone who is pitching you a trust, the first thing you need to ask is to meet with the lawyer at some point in the process. Ask this question: "Who is the lawyer who prepared this?" And then, ask to meet with the attorney. Often, no such person exists.

Typically, they will tell you that if you actually meet with the attorney, it will cost you more. But, I've seen the prices these folks who operate these trust mills charge, and you'd pay similar fees for an attorney to draft the trust, plus you'd get the extra value of knowing it was prepared by a professional. You'd also have the comfort of knowing that if you needed to make any changes, or ask any questions, the attorney would be available, whereas these guys often can't be found. Many of us (attorneys) will often answer simple questions about a trust we've done for a client, over the phone, and not charge for that advice.Good luck trying to get changes made to your trust with the trust mill folks.

Bottom line: Before you sign a document purporting to be your "Loving Trust" or "Living Trust," consult with a lawyer. The document may contain some surprises for you that you had not known, and that had you known, you'd have not allowed.(For some more information on trusts, listen to my podcast on Indiana Law)

Internet Client Makes Millions

A few years ago, I did some legal work for a client whose primary sales came from the internet. Those sales were in the millions. Often, I'd be in the client's office all day and into the night, and the phone would ring constantly. The calls came in from all over the continental USA. On one particular day, I watched as one of the salesmen actually made $50,000.00 in sales in a single day. As the business grew, his record fell, when another salesman did over $100,000 in a single day.

What stunned me more than anything was that these were high-dollar items he was selling. It was not uncommon for a customer to make a $10,000 purchase. In conversation with the man in the company who made it all happen, he told me what he'd done, and how he'd done it. There was no hi-tech or fancy work required, but it did require some knowledge of how the internet worked and how to attract business to a web site. He had learned about selling on the internet when he'd written a book on IRA's and had it leap to a #1 spot on the New York Times Best Seller list. He quit doing accountant work and began selling his boss's products and when I last saw him, was earning well over 6 figures a year.

That experience spurred me to look closer at the web profiteers on the internet, those who are making tons of money selling products and services. It's been an interesting study. There are some very good courses out there for learning (as well as some very bad ones). The rule is definitely caveat emptor.

Trusts & Wills – the differences

When you set up a trust, it is something that "comes alive," or is legally effective the moment you sign the trust document. A will is different in that while your will is legal, it really does not take effect in legal terms until your death. Prior to your death, it is not a document that is, in the strict sense of the word, "enforceable." For example, if you leave Susan $100,000.00 in your will, she cannot sue to get that will enforced, prior to your death, since the will is not going to be effective until it is probated (which is where the will is submitted to the Court and administered via the statutory processes mandated).

A trust works something like this:

Let's say you own a valuable painting. It's worth $100,000.00. You have your attorney prepare a trust, naming yourself as the Trustee, and naming yourself as the primary beneficiary. You also name a successor Trustee. Let's say you name your daughter (could be a son, or spouse) as successor Trustee. This is the person who will be the Trustee once you pass on, or if you're incapacitated. You also named your daughter (or son, or spouse, or children) as secondary beneficiaries. In other words, she (or they) will take the property after you pass on.

You also have language in the trust that says, in essence, that you get to use that painting all your life, and in fact, if you ever want to sell it, you can. Now, sometimes it isn't wise to have language like this in your trust as it can have some tax implications, but for this example, it works.

When you die, the successor Trustee comes in, values the painting, files any tax returns necessary, and distributes the cash remaining to the beneficiaries as spelled out in the trust.

A will works like this:

You have your lawyer draw up a will. It must be executed (signed) under very strict circumstances. The law is very precise here. For example, in most states, there is a requirement for two witnesses. If one of those witnesses does not actually WITNESS the signing of the will, your will can be contested, perhaps even thrown out. There was a rather famous case in the state of Indiana where one of the witnesses was staring out the hospital window in the room where the testator was signing his will. He didn't see the will signed. The Court refused to probate the will.

Here is some information on competency in wills and trusts in a podcast.

Fear in the Court Room

Fear plays an important part in litigation.

Lawyers are afraid of losing, or perhaps intimidated by opposing counsel, and depending on the judge, they may also fear the jurist selected for the trial.

A courtroom is a always a cauldron of emotions. Lawyers are nervous, rehearsing their opening remarks, or furiously flipping through documents, looking for something remembered as being important; and the client sits at the table, gut tight with fear of the unknown, worried about how he’s going to appear to the jury, and very frightened about having to go on the stand. He’s afraid he’s not going to remember his part, and worse, he’s more afraid of the other lawyer.

Most witnesses who testify in a court room are inexperienced. They’ve never even been in a court room, and if they have, they’ve not likely been sitting next to a judge answering questions. It is a frightening event for many, if not most, witnesses. It’s especially frightening if the witness is afraid of being asked certain questions or being asked about certain aspects of the case that may be delicate. It might be the lawyer has informed the witness that there is some weaknesses in a particular area, and that if they don’t testify correctly, the case could be lost. That’s a lot of pressure on a witness, especially if he or she is a party.

On the stand, during questioning, the witness may reason this way: If I lie, I’m liable to get caught, and that is perjury, so something bad can happen, maybe even jail. Most witnesses are not knowledgeable about the penalties of perjury and assume the worst, to wit, jail. While jail is certainly a possibility, it is unusual.

As a lawyer, I always like my own witnesses to be calm and unafraid. Usually, they are, with me. It’s when the other side begins questioning them that they often get nervous and suddenly can’t remember things.

I once had a client who actually could not remember his name when asked by the judge. He was so afraid that when the judge, who was an ill-tempered despot, suddenly took him away from me during direct examination because he (the judge) wanted an answer to a question that popped into his little mind, that my client froze.

The judge, after asking his question several times, suddenly shouted: “Do you even know your name?” He was greeted by silence, whereupon, the judge said, “Seriously, what is your name?” Again, silence.

Finally, I intervened and asked the judge if I could continue asking my client questions. He leaned back, obviously frustrated, and I gently asked my client to tell the judge his name, which he did.

In another case, I was cross examining an executive. He did not appear to be nervous at all. He was pretty smooth and delivered his answers to his own lawyer in a powerful and convincing fashion. He worried me because he showed absolutely no fear. I began questioning him and he held up pretty good. He was making points with the jury. Suddenly, I paused for a long moment, then moved closer to him and stared straight into his eyes without saying a word. My stare was very unfriendly. Then, with a look and tone of voice that suggested I had some secret source of information, I asked him a question and made it sound as though I might already know the answer. I didn’t, of course, but I wanted to move him off that level of confidence he exuded.

He started to answer, then stopped. I could see he was weighing the options, calculating the damage he’d suffer if he responded with a lie and was caught, and the damage he’d suffer if he told the truth. He opted for the truth, since he assumed I already knew it, and to lie would make that truth worse. I saw the fear come into his face and eyes after that, and his voice was not the strong, vibrant one that had been wreaking havoc to my case. I played that game with him for about a half hour, getting information from him that was incredible and very useful for us.

Lawyers often play those kinds of games with people. Sometimes, they can backfire. But, sometimes they are very necessary.

There are just too many accomplished liars out there.

Fear can be a great tool for bringing out the truth.

(It can also shut a witness up quicker than duct tape.)

Copyright 2008 Voyle A. Glover, Esq.

The Value of the Life of a Housewife: Wrongful Death in Indiana

A few years ago I met with a man who’d just lost his wife in an automobile accident. It was a terrible accident and he was left with two small children to raise. What made it even worse, the man was suffering from a serious physical disability. His wife was the sole “breadwinner” in the house. She worked odd jobs when she could, played nursemaid, cleaned and cooked, ran him to the doctors, and was mother and tutor to their two young children. She was an exceptional woman.

In the state of Indiana, and in most every other state, every “wrongful death” case (where a death is caused by the wrongful or negligent actions of another), requires that there is some evidence gathered showing the value of that person’s life. It is an unfortunate reality of our society that a life has to be valued in dollars in order to right the wrongful taking of that life (as though we could really measure one’s life in dollars). Our legal system is set up such that most wrongs are righted by compensation in the form of dollars. This is not to say there are not other non-monetary remedies. There are. The Court can, for instance, order a defendant to perform some kind of duty owed to another. But when it comes to personal injuries, including wrongful death, the primary remedy is in dollars.

I learned something in this case about valuing a life, particularly about valuing the life of a woman who did the kinds of things that wives and mothers typically do on a daily basis. This woman was a dedicated wife and mother. She was busy from the time she got up in the morning until she fell into bed late at night, exhausted. She’d get up early in the morning, fix breakfast for the family, then would help the kids get ready for school, then she’d rush them out the door with words like “Come on! Hurry or you’re going to be late for school!” as though being late for school was akin to missing out on Christmas.

Then, on many days, she’d return home, help her husband dress, then drive him to a doctor’s appointment. After she’d returned home, she might spend the day cleaning, washing clothes, or other household chores, including mowing the grass, or, in the winter, shoveling the driveway. On other days, she’d drive over and clean a house for money, or she’d help out someone who was in need of some nursing care (she was a nurse, but had to quit her job when her husband became disabled).

I hired an Economist and asked him to evaluate her worth as a nurse, calculating the money that she could have made in the job market for the duration of her working life; and then, I asked him to make the same valuation for her role as a housewife. I told him what she did on a regular basis. Her contributions to the household were then valued on those services she performed for the family.

The numbers was stunning.

Her value as a mother and wife was twice the value as a working nurse! Needless to say, I chose to present to the other attorney the value of her life as a mother and wife. The valuation was very instrumental in enabling me to achieve a significant settlement for my clients, the husband and children.

That case taught me a lesson as to the true value of a housewife. They do an incredible job, one that is often thankless. They are up in the night playing nurse to a sick child, and then they’re running a taxi service (when they’re not running a small eatery, filling the role of cook, waitress, and dishwasher). Then, they magically assume the form and nature of a maid, changing bedding, washing clothes, cleaning dishes, and a host of other chores that are never-ending. Housewives are incredible.

Would God husbands and children would learn to appreciate what they do.

No man can ever (truthfully) say that a housewife doesn’t work hard. If he does, he’s either lying or ignorant. Most housewives work harder than the man of the house. I’m convinced of that. (I know my wife works harder than I do.) Most men could not afford to hire a woman to do the amount of work a mother and wife does on a daily basis.

Men and children who take their wives and moms for granted ought to be sentenced to a week of having to do her work. All of it. And, to do it just as good as she does it.

(Most men would, thereafter, probably be willing to pay her substantial sums to stay on the job.)