What Are Revocable Living Trusts?

Oct 14

 What Are Revocable Living Trusts?

All trusts are a type of legal contract between three parties:

  • The Grantor, also known as settlor, trustmaker, or trustor, is the person who forms the trust.
  • The Trustee is the “manager” of the trust, whose job is to carefully follow the terms of the trust.
  • The Beneficiaries are the individuals who may receive income or principal from the trust.

When a revocable living trust is formed, one person typically serves in all three roles as grantor, trustee, and beneficiary, during his or her lifetime.

Creating the Trust:

The first step is to create the trust document which provides instructions for the trustee concerning how the assets should be managed and distributed.  This document looks similar to a last will and testament but contains additional provisions concerning the management of property during the grantor’s life and the ultimate distribution of assets over time.  The trust document would answer the questions of what, to whom, how, and when the assets should be distributed.

Revocable:

A revocable living trust can be changed or modified at any time by the grantor of the trust so long as he or she has capacity.  From the grantor’s perspective, the trust assets continue to be completely available for his or her use.

Successor Trustees:

Although the grantor often serves as the initial trustee, successor trustees should be named in the event the grantor dies, becomes incapacitated, or is unable to serve.  This list of trustees allows the trust to pass seamlessly and the terms of the trust to be carried out.

Funding the Trust:

Once the trust is formed, the next step involves the transfer of the grantor’s assets into the trust.  For example, the grantor’s bank accounts are re-titled in the trust, the grantor’s house is deeded into the trust, and the grantor’s life insurance beneficiary is changed to the trust.  By transferring all of the grantor’s assets into the trust, no assets will be held in his or her name alone.  Accordingly, by removing the assets from the grantor’s name, a probate process, along with the consequent delay, hassle, and expense, is avoided.

Pour-Over Will:

A pour-over will serves to transfer into the trust any assets that someone might still own in his or her name alone at the time of death.  The objective is to be sure that this will does not have to be probated.  In other words, the grantor of the trust wants to be sure that all of his or her assets have already been transferred to the trust.  However, it is always possible for someone to pass away without having transferred everything into his or her trust, and it is good practice to have the pour-over will as a back-up or safeguard.

By utilizing and fully funding a trust, the grantor’s estate avoids the various problems associated with probate.  Moreover, the assets can be held and distributed in the exact manner desired by the grantor.  The result is that the grantor’s wishes for his or her estate are given effect more efficiently.

A trust can greatly benefit a client and his or her family, but an in-depth understanding of the trust’s operation and benefits should be understood.  If you believe a trust or other estate plan may benefit you, please contact one of Clark, Mize & Linville, Chartered’s attorneys to discuss your situation.

Written by:     Joshua C. Howard 

Related Practice Area:          Wills, Trusts and Estate Planning 

Dustin J. Denning Named 2023 Best Lawyers® “Lawyer of the Year” in the Area of Medical Malpractice Law – Defendants

Aug 18

Clark, Mize & Linville, Chartered, attorney Dustin J. Denning was recently recognized by Best Lawyers® as the 2023 “Lawyer of the Year” for Medical Malpractice Law – Defendants.

Only a single lawyer in each practice area and designated metropolitan area is honored as the “Lawyer of the Year,” making this accolade particularly significant. These lawyers are selected based on particularly impressive voting averages received during the peer review assessments.

Receiving this designation reflects the high level of respect a lawyer has earned among other leading lawyers in the same communities and the same practice areas for their abilities, their professionalism and their integrity.

In addition to the “Lawyer of the Year” award, Dustin J. Denning was also listed in the 2023 edition of The Best Lawyers in America® in the following practice areas:

  • Personal Injury Litigation – Defendants

Since it was first published in 1983, Best Lawyers has become universally regarded as the definitive guide to legal excellence.

Six Lawyers from Clark, Mize & Linville, Chartered, are Recognized in The Best Lawyers in America© 2023

Aug 18

Clark, Mize & Linville, Chartered, 129 S. 8th Street, Salina, is pleased to announce that it has six attorneys named to the 2023 Edition of The Best Lawyers in America® publication, with one attorney receiving the “Lawyer of the Year” designation. 

Since it was first published in 1983, Best Lawyers® has become universally regarded as the definitive guide to legal excellence. Best Lawyers lists are compiled based on an exhaustive peer-review evaluation. More than 116,000 industry leading lawyers are eligible to vote (from around the world), and it has received more than 17 million evaluations on the legal abilities of other lawyers based on their specific practice areas around the world. For the 2023 Edition of The Best Lawyers in America®, more than 12.2 million votes were analyzed, which resulted in more than 71,000 leading lawyers honored in the new edition. Lawyers are not required or allowed to pay a fee to be listed; therefore inclusion in Best Lawyers is considered a singular honor. 

“Lawyer of the Year” honors are awarded annually to only one lawyer per practice area in each region with extremely high overall feedback from their peers, making it an exceptional distinction. 

The following attorneys were named:

Peter L. Peterson has been included since the publication’s inception in 1983 and currently is listed in the practice areas of Trusts and Estates, Non-Profit/Charities Law, Tax Law, and Employee Benefits (ERISA) Law.

Greg A. Bengtson has been listed since 2021 in the practice area of Municipal Law. 

Eric N. Anderson has been listed since 2013 in the practice areas of Business Organizations (including LLCs and Partnerships) and Trusts and Estates.

Dustin J. Denning has been listed since 2018 in the practice areas of Medical Malpractice – Defendants and Personal Injury Litigation – Defendants.  Dustin also received the Best Lawyers® 2023 “Lawyer of the Year” award for Medical Malpractice Law – Defendants.

Peter S. Johnston has been listed since 2016 in the practice areas of Medical Malpractice – Defendants, Personal Injury Litigation – Defendants, and Insurance Law.

Aaron O. Martin has been listed in the practice areas of Bankruptcy and Creditor Debtor rights/Insolvency and Reorganization Law and Mortgage Banking Foreclosure Law.

Clark, Mize & Linville, Chartered Seeks Associate Attorney

Jul 21

Clark, Mize & Linville, Chartered, an AV-rated law firm in Salina, Kansas, of eleven lawyers, five of whom are listed in the 2022 edition of The Best Lawyers in America© publication, seeks an associate attorney in the areas of health care & hospital law and litigation, including medical malpractice defense, insurance defense, and workers’ compensation defense.   The firm offers competitive compensation and benefits and is an equal opportunity employer.  Inquiries should be addressed to Peter S. Johnston or by email to psjohnston@cml-law.com

Defense Verdict Obtained in Perforated Esophagus Case

Jul 06

Dustin J. Denning, with assistance from Jared T. Hiatt, successfully defended our client, a family practice physician, in a medical malpractice jury trial in which the plaintiff alleged that our client was negligent when performing an esophageal dilation during which the esophagus perforated, leading to a pneumothorax and pleural effusion that required transfer to another facility for the surgical repair of the perforated esophagus.  The plaintiff alleged at trial that our client deviated from the standard of care in (1) failing to obtain proper informed consent; (2) perforating the esophagus with the guidewire that was used during the dilation that involved the use of a Savary brand bougie dilator; (3) failing to recognize the perforation at the time it occurred; (4) failing to recognize signs and symptoms of perforation after the procedure was completed; (5) failing to order appropriate testing to look for the cause of plaintiff’s signs and symptoms; and (6) prematurely discharging plaintiff from the hospital. 

The plaintiff alleged that our client allowed the guidewire to migrate out of the stomach and into the esophagus, which caused the perforation and allowed for spillage of esophageal content into the pleural cavity.  Shortly after the procedure, the plaintiff began complaining of vague rib pain and shortness of breath.  The rib pain was in the same area where plaintiff had sustained rib fractures several months earlier that our client had treated.  Our client ordered a chest x-ray that was read as normal.  After a period of further monitoring, plaintiff’s pain complaints subsided, and she asked to go home to rest after meeting all discharge criteria.  Our client agreed and discharged her home.  Plaintiff returned to the hospital by ambulance about two hours after discharge complaining of significant pain and shortness of breath.  Our client promptly diagnosed the perforation and arranged for the patient’s transfer to another hospital for further treatment and repair of the perforation.  Plaintiff was hospitalized for nine days and appeared to have made a full recovery by the time of trial, though she continued to argue that she had pain in the area where chest tubes had been placed and a worsening of her mental health problems.  The plaintiff sought more than $300,000 at trial.

We defended the case by showing that for the perforation to have occurred the way plaintiff says it occurred, the tip of the guidewire would have migrated more than 12 inches out of the stomach.  Our client’s procedure team, consisting of two experienced nurses, testified at trial and explained their roles in safely performing the procedure which included watching for migration of the guidewire.  Our client also demonstrated to the jury how the procedure is performed, and we argued that it would have been nearly impossible for the guidewire to migrate 12-plus inches and not be seen by anyone.  Our expert witness, a general surgeon who performs esophageal dilations, testified that the likely cause of the perforation was the mechanical effect of stretching the stricture, which is a known complication that can occur absent negligence.  We also demonstrated that the plaintiff was informed of the risks of an esophageal dilation, including perforation, despite her claim that our client never explained this potential complication to her.  After a five-day jury trial, a Republic County, Kansas, jury agreed and returned a 12-0 verdict in favor of our client after deliberating about 25 minutes. 

Protecting Assets Against Your Children’s Creditor’s

Jun 09

Protecting Assets Against Your Children’s Creditors

 

Assets can be left to beneficiaries in any number of various ways, and the grantors are able to choose the “what, whom, how, and when.”  In discussing the options, it is often best to start by describing the two ends of the spectrum:

  1. Outright and Free of Trust – At one end of the spectrum is to leave the entire inheritance all at once, in one fell swoop. This is sometimes referred to as the “cash on the barrelhead” approach.  The beneficiaries are free to do with the assets as they please – spend them, invest them, etc.  The advantages of this approach are, of course, simplicity and accessibility.

 

  1. Held Back in Trust – The other end of the spectrum is to not leave the beneficiaries the entire inheritance all at once, but rather continue the trust, with the assets retained, to be held, managed, and distributed to the beneficiaries, over an extended period of time. The advantage of this approach is reducing the risk of loss of the trust assets due to the following reasons:

 

  1. Mismanagement. More than a few dollars are lost each day via fear, greed, ignorance, inattention, waste, mistrust, bad judgment, and lack of common sense.  A continued trust with professional money management can greatly reduce these risks.

 

  1. Taxes. The IRS takes different bites at different times – income taxes, estate taxes, sales taxes, etc. – but they all add up to a significant amount of a person’s assets.  Income and estate taxes may be reduced, simply because the continued trust is another entity – separate and apart from the beneficiaries.

 

  1. Divorce. Assets acquired during the course of a marriage – including inherited assets – are generally considered to be part of the “marital estate” and are therefore subject to division in a divorce proceeding.  Assets in a continued trust are not reachable by a divorcing spouse.

 

  1. Lawsuits. Lawsuits are increasingly common and can cause someone to lose a substantial part of their net worth.  Ongoing trust assets are similarly not reachable by lawsuit claimants.

 

  1. Bankruptcy. This is the ultimate depletion of wealth – a person losing all of his or her non-exempt assets due to the inability to pay off debts.  Assets held back in a trust are generally not subject to a bankruptcy.

 

Assuming one opts for the continued trust approach, the next issue is to decide upon the terms and conditions for the continuation.  The trust assets could be held for a period of time or for a beneficiary’s lifetime.  Distributions of income and principal could be either discretionary or mandatory.  Additional rights of a beneficiary to demand a withdrawal, remove a trustee, or re-write the trust can also be structured into a trust.  There are almost limitless options in this arena that should be discussed with knowledgeable estate planning counsel.

 

Written by:  Joshua C. Howard 

Related Practice Area: Wills, Trusts and Estate Planning

 

Real Estate Sales

Apr 23

Real Estate Sales

Realtors, brokers, and auctioneers play important roles in marketing and selling real estate.  In some instances, however, sellers already have buyers lined up or choose to sell on their own.  Our attorneys can assist in these situations.  Some sellers and buyers ask for our assistance in negotiating the price and terms of the sale.  Others ask us to prepare the real estate contract once the deal has been reached and then review deeds, title insurance policies, and documents prior to closing.

We can provide a checklist of terms to clients who chose to negotiate the terms of the sale on their own.  Our attorneys then use this information to prepare the real estate contract to best protect our clients’ interests.  The basic information needed to prepare a residential real estate contract includes the following:

  • Seller and buyer contact information
  • Legal description of property
  • Personal property included, if any
  • Purchase price
  • Earnest money
  • Closing date
  • Loan and appraisal contingencies
  • Termite, radon, and whole-house inspections
  • Division of closing costs, such as title insurance, loan costs, and deed recording
  • Title company
  • Seller warranties
  • Other contingencies

In preparing real estate contracts for farmland, additional items must be considered, including:

  • Mineral and water rights
  • Tenant rights and possession
  • FSA and NRCS payments
  • Allocation of taxes

When the parties agree to seller financing, our attorneys can prepare the installment sale documents or the necessary promissory note and mortgage, depending on which method would best meet the parties’ needs.  We can also incorporate 1031 like-kind exchange provisions in the real estate contract to avoid paying income tax.

If you would like more information about selling your home, farmland, commercial and other properties, please contact one of our lawyers to assist with the transaction.

Written by:      Joshua C. Howard

Related Practice Area:            Real Estate Law , Agricultural Law 

How Can I Protect Assets From Nursing Home Expenses?

Mar 09

 

How Can I Protect Assets From Nursing Home Expenses?

A common question from clients who anticipate needing long-term care is: can I protect my assets, such as a family farm or business, from being sold to pay for my long-term care expenses?

One possible method of doing just that is a Medicaid Asset Protection Trust (“MAPT”), which is a specialized irrevocable trust that can be used in Medicaid planning situations.  The fundamental purpose of creating a MAPT is preventing assets from being considered “countable resources” on the grantor’s Medicaid assistance application.

Once a grantor creates a MAPT, the next step is transferring specific assets to the trust to be protected.  The MAPT – not grantor – will be the owner of those assets, and five years later, the assets would not be countable when determining Medicaid eligibility.  The MAPT also protects the assets against creditors of the grantor and beneficiaries.

During the life of the grantor, the MAPT remains intact.  The income from the MAPT can be distributed either to the grantor or to the eventual beneficiaries.  Upon the death of the grantor, the assets can then be distributed to the grantor’s children or other beneficiaries in the manner desired by the grantor.  The grantor has great flexibility in structuring how the assets are ultimately transferred.

The MAPT is irrevocable meaning that the grantor must give up the power to revoke or amend the MAPT.  Typically, when a grantor gives away property the beneficiaries receive an unfavorable “carryover basis.”  The MAPT is designed, however to allow the assets to receive a “stepped up” income basis upon the death of the grantor, which can greatly reduce the amount of income tax eventually paid by the family.  In establishing the MAPT, the grantor can also decide who will be taxed on the income each year.

Assets can certainly be given outright, not involving a MAPT.  Outright gifts have the advantages of being simple with minimal costs.  So, why complicate things with a trust?  The short answer is that gift transaction costs are only part of what needs to be considered. Many important benefits that can result from gifting in trust are forfeited by outright gifting.  These benefits are why some individuals choose to utilize MAPTs in Medicaid planning.

If you believe that you or your family could be benefited by establishing a MAPT, please contact Clark Mize & Linville’s attorneys who specialize in trusts and estate planning.

Written by:   Joshua C. Howard

Jessica L. Stoppel

Related Practice Area:            Elder Law

Wills, Trusts and Estate Planning

Why Would You Want to Avoid Probate?

Oct 29

Probate is a court process that allows for assets to be distributed either pursuant to intestacy or the decedent’s will.  When a probate administration is necessary at someone’s death, the named executor or administrator must go through formal court processes in order to transfer the assets.  The fiduciary must file various pleadings, such as a petition, order, notice, and inventory, in order for the court to act.  Published notice in the local paper as well as court hearings are usually required.

One advantage of probate is that assets are generally distributed in a responsible manner to the right people, in part due to the rigid process and court supervision.  Despite its common use, probate has a number of disadvantages:

  • Delay – A supervised or simplified probate estate in Kansas cannot be closed until six months have passed after date of death. Although the length of probate processes vary, the average administration takes nine months or more.
  • Hassle – Probate administrations are often a hassle in part because executors and administrators typically have not served in such a capacity previously. They are often learning on the job.
  • Expense – Due to the necessary processes, estate assets are often diminished three to five percent due to probate costs.
  • Lack of Privacy – Probate proceedings are a matter of public record. Accordingly, if someone dies and probate is necessary, his or her assets and beneficiaries are opened up to anyone who cares to see.
  • Boundary Lines – Probate proceedings are only valid in the county where the administration occurs. If someone dies owning assets in more than one county or more than one state, then multiple probate administrations may be necessary.  The previously mentioned disadvantages would be multiplied in this case.
  • Lack of Organization – When a probate administration occurs, the person who knew the most about the assets (the decedent) is gone. Accordingly, probate proceedings often involve an investigative process for the heirs and lack organization overall.

If you are interested in avoiding probate for your estate or navigating a probate estate for a loved one as efficiently as possible, please contact one of Clark, Mize & Linville, Chartered’s attorneys.

Written by:      Joshua C. Howard

Related Practice Area:            Wills, Trusts and Estate Planning and Probate and Estate Settlement

Five Lawyers from Clark, Mize & Linville, Chartered, are Recognized in The Best Lawyers in America© 2022.

Oct 08

Clark, Mize & Linville, Chartered, 129 S. 8th Street, Salina, is pleased to announce that it has five attorneys named to the 2022 Edition of The Best Lawyers in America© publication.  Since it was first published in 1983, Best Lawyers® has become universally regarded as the definitive guide to legal excellence. Best Lawyers lists are compiled based on an exhaustive peer-review evaluation. Almost 108,000 industry leading lawyers are eligible to vote (from around the world), and is has received over 13 million evaluations on the legal abilities of other lawyers based on their specific practice areas around the world. For the 2022 Edition of The Best Lawyers in America©, roughly 9.4 million votes were analyzed, which resulted in more than 67,000 leading lawyers being included in the new edition. Lawyers are not required or allowed to pay a fee to be listed; therefore inclusion in Best Lawyers is considered a singular honor.  The following attorneys were named:

Peter L. Peterson has been included since the publication’s inception in 1983 and currently is listed in the practice areas of Trusts and Estates, Non-Profit/Charities Law, Tax Law, and Employee Benefits (ERISA) Law.

Greg A. Bengtson has been listed since 2021 in the practice area of Municipal Law.

Eric N. Anderson has been listed since 2013 in the practice areas of Business Organizations (including LLCs and Partnerships) and Trusts and Estates.

Dustin J. Denning has been listed since 2018 in the practice areas of Medical Malpractice – Defendants and Personal Injury Litigation – Defendants.

Peter S. Johnston has been listed since 2016 in the practice areas of Medical Malpractice – Defendants, Personal Injury Litigation – Defendants, and Insurance Law.  In addition, Mr. Johnston has been recognized as “Lawyer of the Year” in the area of Insurance Law in the Wichita area for 2022.  The individual attorney with the highest overall feedback from peers is recognized as the “Lawyer of the Year” for each specific practice area and geographic region.