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  • Jenny Rozelle, Host of Legal Tea

Cautionary Tales - Estate Plan is Lost, Help! - Episode 18


Hey there, Legal Tea Listeners –This is your host, Jenny Rozelle! Today’s episode of Legal Tea is a cautionary tale – a real-life case with real-life clients with real-life facts; though names are altered for confidentiality purposes!


You know, there are times that I share crazy stories with clients and they’ll say, “Jenny, you need to write a book!” I guess now I can see, “Well … what about a podcast?! I’ve got a podcast where I blab about stories!” Today’s topic reminds me of one of those crazy stories that I’ve told to clients … that it’s so looney that I sometimes think clients wonder if I’ve totally made up these stories in my head. They may be in my head, like as a memory, but they’re certainly NOT made up. Crazy enough, they’re real…


So, let’s get down to business…


Alrighty, one day, a paralegal grabbed me because she had taken a weird call and wanted to make sure we could even help the prospective client. I was like, “Okay – lay it on me. What’s going on?” She proceeds to tell me that the person on the phone shared that their family member passed away, had an estate plan (specifically a Trust), that assets are held inside the name of the Trust, and no one can find the Trust document. They’ve searched high and low, and it’s nowhere to be found.


That was a first – I had never heard of that happening before. Granted, it’s obviously very possible that the estate plan is totally missing – but I had never had to work on a case that had this issue. So, I reached out to my office’s former owner to see if she had ever run across something like it – thinking, “well she practiced for nearly 30 years. Surely she’s seen this!” Nope. She hadn’t either. Alrighty then… I remember thinking, “I guess I’m heading to do some research…”


As I got deeper into the research, I started figuring out what needed to be done – which we will get to in a bit – but before I really developed a plan of attack, I needed some more information from the prospective client so I could make their upcoming first meeting with me very productive. Mainly, I needed to know “who” was involved – family member-wise – as well as telling the caller I needed some documentation showing what assets were inside the name of the Trust.


After I gathered family information and the caller sent me some documents … I started connecting the dots. Let’s see if you can hang with me on this one—


The Trust was actually the caller’s grandmother’s Trust – the grandmother had passed away over 10 years ago. The grandmother had one child – who was the caller’s Dad. The caller’s Dad passed away this year in 2021, and the caller was administering her father’s estate when she located the assets that were held in her grandmother’s Trust. So, let’s do it like this … for my more-visual listeners:


Think of grandma at the very top tier – she passed away in the early 2000s. Grandma had the one child, who passed away in 2021. Imagine him as the second tier. The final and third tier represents the grandmother’s child’s children, and that is the caller + her 3 siblings.

I HAVE worked a case where the top tier person passed and the second tier person passed – and the top tier had a house in their name that never got transitioned to the second tier. So, the third tier asked me to help them get it from the top tier to them – the difference here is that in that case, the people that had passed away did not have an estate plan at all (no Will, nothing…) so we just went by the intestacy statutes. We opened an estate in the top tier person’s name AND second tier person’s name … then transferred the house from the top tier person’s estate to the second tier person’s estate. Then transferred the house from the second tier person’s estate to the third tier/intestate beneficiaries.


Here, with this case, there WAS a governing estate plan – a Trust – and the thing that was supposed to govern assets was missing … lost … couldn’t be found. Ugh!


So, I had done my research and I was ready for the meeting with the prospect – and I remember telling my co-worker/fellow attorney, who was joining me for the meeting, that I hoped the prospect was a reasonable person because there’s a legal process that we have to go through … and it won’t be easy … it won’t be fun … but it’s the most appropriate course of action. Fast forward a bit, thankfully the prospect was super reasonable and understood – shew!


The financial institution that was holding the assets inside grandma’s Trust stated they “needed something showing the granddaughter/the caller was now the Trustee of grandma’s Trust.” The issue with that sentence is that it totally minimizes the appropriate process – I think the caller thought I could just whip up a document that states, “Okay, now this person is the successor trustee and things are fine and dandy!” If I did that, I’d be taking on liability – like, what if grandma’s trust put a bank as a corporate trustee, the bank should have earned compensation serving in that role, or something – who knows! The dang document is missing…


So, as I explained to the granddaughter, I can’t just willy-nilly appoint someone – I’m not THAT powerful. Attorneys have a lot of power in the legal system, but not THAT much power. So, at this point (and I shared this with her), I firmly believe that the only “person” that has the authority to appoint a successor trustee (without a Trust document) would be to involve the Court and have the Judge appoint “who” it is. Annoying? Yes, for the family. Cumbersome? Yes. Was it the best solution? Yep.


I proposed to the granddaughter that we do two things – 1) we get a probate estate opened for grandma and 2) once the probate estate is opened for grandma, ask the Court to make the Trust assets payable to grandma’s estate. After all my research, there may have been ways to do it an easier way, but what I was most concerned about was the liability on the family – the granddaughter especially. Like, what if the Trust gets found 20 years later (somehow, some way) and the Trust beneficiary was a church, a charity, someone else besides the family…


Likely? Maybe not. Possible? Yes.


I told the granddaughter that there are probably some ways that we could have taken the cheap/easy way, thrown together an agreement between all the parties, kept the Court out of the picture, etc., but if it were my family, this is the path I would recommend. You see – as much as I don’t like getting the Court involved, here there are two advantages in doing so:


1. First, part of the probate process is to publish “notice” of the estate “to the world” in a newspaper – so what does that mean? Going through a more formal process will start tolling the statute of limitations on anyone trying to kick up a fuss later – as in, say in my example earlier, what if grandma did put her church as her Trust’s beneficiary and they happen to find a copy of her Trust? Ideally, the statute of limitations has tolled and they would be essentially … S.O.L. You know, *beep*out of luck.


2. Second, running it through the Court will keep things CLEANER between grandma’s estate … then paying her son’s estate … then the son’s estate paying the son’s 4 children. Because the Court is involved and me, the attorney, is involved, things will be kept on the up-and-up more to, again, make sure everyone is on the same page. Not to mention, we’ll have Court Orders to provide to the financial institutions to force them to comply. Again, cleanliness…


So that’s what we did – the client (good client!) listened to my recommendation – after all, she didn’t have to. She could’ve said, “Jenny, I hear ya – but I think we are going to just do the ‘cheap and easy’ option and have you do an agreement between all of us.” If they chose that, I would have instantly started papering the heck out of their file – like, “I recommended they do Y, and they chose to do Z.”


That way, if anything DID happen in the future, they couldn’t come back on me! But thankfully, she recognized that the involvement of the Court was a GOOD thing, formalized things, and ultimately gave the family peace of mind knowing finally after many years since grandma passed, Ts were crossed and Is were dotted.


When it’s time for you to #DoYourEstatePlan, let’s be sure it doesn’t get lost. There are a few things that you can do after your estate plan is created to ensure your family is not in a similar boat. So, let’s talk about them…


First, put your documents in a SAFE place – but also put them in a place that is, sort of, intuitive for your family (if you choose not to tell your family where you’ve put your documents). For example, I remember my own grandma used to put important stuff in her freezer – I’d reach in to get a ice cream bar and some important piece of paper would fall out. Don’t put your estate plan in your freezer (or any other silly place equivalent to a freezer). Oftentimes, I recommend a fire proof safe – the investment in something like that will be worth it. Along those same lines, I do NOT recommend a safety deposit box at a bank – banks get really weird when people die and oftentimes, don’t let the family access the box.


Second, perhaps make digital versions of your documents and store them safety on your computer (PS – If this route is a thing for you, do make sure your family knows how to get on/login to your computer if you were to pass….) My office maintains a hard copy of clients’ documents and a digital version, too, and sometimes when I explain this to clients, they’ll say, “Hey can you send me digital versions?!” So, ask your attorney to see if that’s an option and if they’re willing/able to do it for you.


Third, giving copies of your documents to your “first” person in charge is both a good and bad thing – just depends. Good thing because they’d, of course, have a copy of your documents if something were to happen to your originals. It’s sometimes “bad” if you were to update your documents at any point – you’d have to remember “who” has copies of your documents and to get them replaced. The last thing you want is to give someone a copy, you update them, not give them an updated version, and they inadvertently operate by the outdated versions. Yikes!


The thing is that Indiana, at least, does not require attorneys (or people) to submit their documents to Court and, like, record them with the State. If I tried to walk into the Courthouse to “record” a client’s Will or Trust or something, the Court staff would be like, “Have you lost your mind, Jenny?!” Sometimes, like in this client’s situation, I wish states WOULD require us to file it or record it – but I’m sure it’d be such a logistical nightmare to manage, so maybe that’s why they don’t do it. So, knowing this, be sure to make appropriate arrangements in your life when you #DoYourEstatePlan; that way, you don’t end up as a Legal Tea cautionary tale!


Next week’s topic is a current event/current trend -- something I’ve seen or run across that I think would be interesting on here. So, for next week, we’re going to be talking about the Indiana Supreme Court upholding a woman’s estate plan (specifically after she passed away) that made her adult son’s inheritance dependent on whether he was married – in the past, that had been considered a no-no for public policy reasons. Anyway, we’ll talk about that next time – Until then, Legal Tea Listeners…be well!


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