Never Say “This Will Be An Easy Trust” with Allison Ferris

Derek sits down with Allison Ferris, Chief Fiduciary Officer at Northwest Trustee and Management Services, to discuss what happens after a trust is established. Allison shares lessons from more than 18 years in fiduciary work, including why she never says, “This will be an easy trust.” They discuss family cabins, unexpected assets, beneficiary emotions, co-trusteeship during incapacity, and why clear, flexible drafting matters so much when a plan may need to work decades from now.

This episode is especially useful for estate planners, trustees, beneficiaries, and anyone who wants their estate plan to hold up in the real world, not just look good on paper.

Learn more about Who Gets What?: https://whogetswhat.fm/ 

This podcast is presented by Jensen Estate Law and produced by Marguerite Productions.

Transcript

Meet Allison

SPEAKER_01 0:01

Hi, I'm Derek Jensen, a state attorney and host of Who Gets What. Alison Ferris is the Chief Fiduciary Officer at Northwest Trustee and Management Services. In this episode, we dive into the nitty-gritty of a topic we've explored throughout the past season: trust. Alison draws on stories and lessons from her 18-plus year career, including how she learned the hard way to never say, this will be an easy estate. Here's our conversation. So, in the name of your company, of course, is Northwest Trustee and Management Services. Can you tell us a little bit about when it got founded and what the company, uh, you know, what what is the company, what it does?

SPEAKER_00 0:44

Our founder, Steve Trust, was a practicing attorney who was just struggling to find trustees that really took care of clients the way he felt they should be taken care of.

Northwest Trustee Origins

SPEAKER_00 0:56

So, some 36 years ago, and of course, this has been passed down to me, the story, but Steve started a trust company in his garage. And it there was a huge need. And so over time, grew and grew, and they ended up having a building. And then, you know, fast forward 36 years, we still have the exact same spirit around client service that Steve instilled in the company, and that's as his legacy. But we now are almost to 50 people, and we serve on all sorts of fiduciary accounts from trusts to serving as durable power of attorney, special needs trusts, estates, and it's really stayed true to the mission that Steve put on that we're going to act with compassion, integrity, professionalism, and have a very high level of service. So it's it's a great state chartered trust company.

SPEAKER_01 1:55

And it definitely fills a need. There's a lot of folks out there who don't fully understand what a tr what a trustee does, what a fiduciary does, and uh sometimes they they don't understand you know all the complexities that go into it. So having a professional like you and the and uh your company here to to help those people is is really important. Um kind of as we're getting into this, I you know, I was thinking about how I how I wanted to start, and I

First Trust Lessons

SPEAKER_01 2:22

and I was wondering if you can remember the first trust you administered, and if you can kind of tell us about, I don't that that has to have been uh a bit exciting and a bit scary at the same time. And maybe you can tell us a little bit about how you were feeling as you were kind of starting out as your first time as an administrator or a trustee on a trust.

SPEAKER_00 2:43

It's funny. I just had to write a paper a couple weeks ago for a leadership retreat, and it and it was asking, you know, why did you join the trust business and why are you still in it? And my opening line was when I grow up, I'm going to be a trust officer, says no one ever. I was hoping to be Neil Diamond's tambourine player. Probably good, that didn't work out, but you know, I ended up becoming a trust officer. But it's one of those professions that you really don't get to learn until you start doing it. And there are good entry ways in. I ended up getting a law degree, which I thought was a good way. And I wanted to be a trust officer. If my dad's a trust officer, was his career, so I knew about it. And, you know, I ended up getting hired in a big bank as a baby trust officer. And you really don't know a whole lot because trust administration is something you have to learn. So I started out shadowing very senior trust officers and learning what a distribution was and all the processes and procedures, and then we had two trust officers leave at the same time. Maybe this was a year and a half into my tenure, and all of a sudden I had a very big book of trusts. And I remember just thinking of the responsibility as I started to administer these trusts and making sure I read through them and understood the terms, and then getting to know the beneficiaries and then the intersection with, you know, if they were court supervised, or just knowing, you know, how do you exercise discretion? Um, a lot of the ones I worked on first were special needs trusts, which are a whole different type of irrevocable trust. And um I remember just feeling the weight of the responsibility, like how important it was to do the right thing for our clients. And I still feel that today.

SPEAKER_01 4:31

So you started out in the big bank world, and that's got to be a great place to start and get a lot of experience. I'm imagining you saw a ton of different uh approaches and types of cases that were going on. But then you came over to uh Northwest trustee and management services, a much smaller company, obviously, than the big bank. Uh tell us about that transition.

SPEAKER_00 4:54

So I had a slight detour between leaving the big bank and coming

From Big Bank to Local Trust Company

SPEAKER_00 4:59

here, and I was actually hired by an investment group to start an OCC, that's the Office of the Comptroller Currency Regulated Bank, so a national bank. Uh I was employee number one. We had nothing on day one. And over the course of three years, and more people were hired, and the team grew. We were able to go through the whole process with the OCC and get the bank chartered. Um, and I was the chief fiduciary officer for that bank. And it was an amazing experience to learn how to put a bank together. It was um on top of the big bank experience, I think that really rounded out my ability to look more holistically at a trust company or bank because I understood from operational to HR to picking systems to hiring employees. Loved that bank. But then I got a call from Northwest Trustee, and I'd been working nationally for many years, and the idea of really being part of a trust company with a sense of place, you know, the Pacific Northwest, the Northwest really appealed to me because I'm from here. And just to be able to connect more with people I'd known throughout my whole career and to be able to help people locally, you know, in the place I call home, in my community, aside from the opportunity to get to work with a company I'd known for a long time that had a great refutation. And I think it was the best career decision I've made. I get to do all the neat fiduciary things, but work with an amazing team of people and primarily help people who are in the communities we live in.

SPEAKER_01 6:40

Getting to work so closely with those families and uh, you know, working with these trusts, it's I sometimes I think that it's

Wild Assets and Estates

SPEAKER_01 6:48

just going to be, you know, the cash or the securities and maybe a primary residence, but sometimes you'll get some unique assets that kind of come into these trusts also, and maybe even some buried treasure, like maybe some gold bars. Do you have any stories about things like that that have come into the trust and how you administer that type of asset when you're in a trust?

SPEAKER_00 7:08

I sure do. And one thing I tell my team, never let me say, oh, this will be an easy estate or this will be an easy trust. Because every time I say that, it's not. And the things that come in, you know, you think, okay, securities, great, we can deal with brokerage accounts. But just recently we had a client pass away very suddenly, and it looked like a pure distribution of her estate, just everything was going to go out to specific bequests. Great. Now there were a lot of specific bequests. Um, but we thought, okay, great. But then we got a call from the attorney who'd been working with her, and it turns out she had multiple houses, chickens, indoor cats, horses, and a horse that was about to give birth. Fortunately, the trust officer, I called, I said, okay, we've got to get over there really fast. And so she was able to go, you know, to where the client had lived and meet with our attorney and the local community. And I just checked in with her yesterday, and the the horse got where it needed to go to have the baby, the cats were adopted. With the estate salesperson is already working just to make sure the property is all presented well for sale, the home is secured, the bridge going across the house was updated so that when the estate sale happens, no one will fall in the river. And it was just one of those where who had any idea that you know the next week your trust officer would be out trying to rehome cats? Um, we've had clients who you know have a family member pass away and they are sure that the family member has more money. And sometimes it's come out and you know, maybe they had buried treasure. And you think, well, you know, the person did write a lot of notes in their house and did like to bury things. So, you know, it's not beyond the scope of possibility. But then you have to think, you know, how likely? And you know, do we at the the family would like us to bring out a metal detector and check things? And you know, where do we where do we draw the limits? But it's things like that that every day we're problem solving, we're on our feet, we're trying to honor the wishes of the deceased or the living client, uh, deal with the family dynamics that invariably come with any of these situations. And sometimes everyone gets along and it's great. And a lot of times the family members aren't on the best of terms, and we do a lot of counselor type activity and mediation and try to keep things fair for everyone. So it keeps you on your toes all the time.

SPEAKER_01 9:52

And I think one of the things that kind of struck me as you were discussing um, not the the castle with the drawbridge or or whatever they had there, but uh the the one here with the buried treasure potentially, is you know, all of these people, they don't have they don't have the same set of information. You know, somebody has this idea, oh yeah, uh, you know, there's there's this over here, and somebody else might have

Setting Expectations Early

SPEAKER_01 10:17

other information, and somebody else will say, well, you know, there's a there they always wanted to have this happen. That's got to be in there. I was told that was going to be in the trust. So it seems like one of the things that could really at the start of it, especially if you're making distributions out to a number of people, is uh making sure that everybody is kind of uh on the same page and knows what the actually controlling documents in, and probably they don't have a very good understanding of how the law actually works either, right? Um is is this the kind of thing it's almost like the the uh proverbial reading of the will where you're you're kind of having to get that information out and make sure everyone is on the same page?

SPEAKER_00 10:55

One of the first things we do, of course, is make sure that everyone is set up for statements, everyone has a copy of whatever the underlying document is. If it's an estate, for example, we will send out a letter explaining in general terms, you know, the process, the timing, what they might expect. Uh, same with trust, you know, trust, uh, trust that's terminated, you know, how quickly can we get it out to the beneficiary? So there's a lot of expectation setting and a lot of education because you're right, for a lot of people, this is absolutely new. And you have to remember, in many situations where it's distributing, you're dealing with family members who have often just had a big loss. And so we always have to look at sometimes maybe people aren't on their best behavior or acting in their most typical way because they're dealing with grief. So, as I said, there's a lot of human psychology in it, and we found best practice over, say, an estate or trust that has a lot of assets that are going to take time to sell is you hold family meetings at least once a month. Everyone can join who wants to. You send follow-up letters so everybody knows what's happening and has the chance to ask questions. And that seems to have really helped people become comfortable with the process who don't know a lot about it. And it's you know, maybe the first time a parent has died, and now they're and and sometimes it can be really hard because, like, well, why wasn't I the PR? You know, how come Northwest trustees the PR? And so helping people understand that too. People can feel left out, or one sibling was named a co-trustee with us and another wasn't, you know, you can have people have hurt feelings. So there's there's a lot that has to be unpacked when you're dealing with a family situation, both with a trust that is currently being administered and making distributions, and also those that have had a death event where we're distributed out.

SPEAKER_01 12:42

In our practice, as we're doing an administration as an estate attorney, you know, we do have those beneficiaries and and you know, we have a certain way that we're gonna be dealing with them, but we're not necessarily the fiduciary.

Handling Beneficiary Emotions

SPEAKER_01 12:54

Sometimes I I take some, it's like, oh, thank goodness I don't have to kind of be listening to this person every day coming back to me with you know whatever it is. But you guys don't have that option, do you? Because they're gonna be coming back to you and and keep coming and and uh it that they're the beneficiary and you're the fiduciary of of that. I mean, that's your responsibility.

SPEAKER_00 13:15

It is. And a lot of times I'll tell my team, you may have a very frustrating beneficiary, you know, things down to the point where, well, you know, how come my sister got the teapot? I know mom wanted to give me the teapot, or you know, no one can agree on who gets mom's car, or people get wound up over relatively small things. But again, there's a lot of sentiment behind that. And we often talk about drawing from your well of compassion, understanding where people are coming from. It's just like I tell my kid, you know, put yourself in their shoes. You know, they are acting a certain way, likely because there's things bothering them, grief, family resentment that's simmered for years. And I will say being a trust officer often takes a lot of patience. You and most of the people who end up in this field too really want to serve. People do kind of self-select into this area because there's a lot of people who it is a lot of emotion, it's a lot of human content, it's a lot of details about human life. But when I look at the team we've hired, every single person on that team, I think finds that fulfilling, not burdensome. And so it is if you someone is out there thinking, hey, I want to be a trust officer when I grow up, you know, you really do have to think, is that can I deal with seeing the whole spectrum of human emotion, human goodness and badness, you know, day in and day out, and still feel like I have the energy to help people.

SPEAKER_01 14:46

Yeah, I mean, I think you're absolutely right. That's it's definitely has to be a calling, I would imagine, especially for someone like you who's who's been in it as long as you have. One of the things that I I often uh explain to clients as I'm as I'm counseling them, and and I refer back to really, I think a meeting that I went to at the Estate Planning Council, uh, where we had a panel and it was a panel of trustees. And the panel was discussing uh the proverbial uh uh

Family Cabin Reality Check

SPEAKER_01 15:17

you know family cabin, the the the property here that's that's somehow going to be kept and preserved for for multiple generations. And of course, this is the vision of of the of the the founder or the you know the matriarch or patriarch with the property, and they they very much would like this to have happen. And I think the advice that everybody that I remember hearing was if you're thinking about putting uh the family cabin in a trust, don't was kind of the answer. And of course, uh, you know, if they if they insist and they insist, still don't. And then, you know, they kind of went in and kind of jumped into a lot of the complexities of of that type of thing. And you know, this is something that hits home for I think a lot of people. It hits home in my own family. Uh my my my dad has an ownership interest in in family property that's been there for a hundred years. And I mean, myself and and many of my cousins uh spent spent a lot of time at that property. And of course, uh, you know, that's the type of thing that, you know, how could this be preserved? What kind of structures would would actually work? Is a trust really the right kind of structure for something like that? And maybe you can speak to that type of an issue.

SPEAKER_00 16:32

Yeah, I mean, it even though attorneys advise don't do it, trustees say don't do it, it happens. And I won't, I mean, I'm not gonna sugarcoat it. It's it's great. Let's say there are three children, they all get along, their kids go there when they're young, everyone's copacitic. Then you get to the next generation, you think, okay, now there's four, two, or three cousins from each of these families, and now you've got more people who want to go to the family cabinet, and then you just take that and you keep going. There gets to be more and more people who have an interest, and it's pretty much guaranteed that not all those people maybe they don't even know each other hardly, or they don't get along. So, aside from just not doing it, you know, if we were to get something like that in today, I think you have to just be very pragmatic about it and not assume everyone's gonna work it out amongst themselves. I think you have to have an agreement, you know, and work with an attorney on an occupancy and use agreement that ensures everyone is treated fairly, that everyone gets time and they don't always get the same time every year. You know, if you get summer one year, maybe you don't get it the next year. And as family members are added, you need to make sure that document has a way that that is going to be addressed because it just gets harder with more and more family members get to the point that they want to use that. Um, you know, and maybe as a person who is thinking they want to do that for their kids, you know, maybe you say, hey, I want this to last for at least the next 20 years so my children enjoy it, and then it will be sold. I mean, those are things I try to look at because mainly you're thinking about the people who are alive when you're alive. I mean, the idea of a legacy is great, but to kind of find a balance between this property just getting split, split, split, split, and saying, hey, I want my children and grandchildren that I know to enjoy it. And then at some point in the future, the trustee does have the authority to sell it and or you know, to pass it out to the family if they want to have it under some LLC that they manage, you could give that option. So it's one of those things that I think people I totally understand why they want to do it, but just trying to talk to them about the realities of it and the disharmony it can cause for their family down the road. I mean, and that's probably the last thing they want to have happen at with something that they valued and loved because there will be family disharmony. You know, there will be someone who gets mad because the last person to use it, you know, used up all the salt and they should have replaced it. Or, you know, I those were my towels I brought, and why is my cousin I don't know using them? And so just it's human nature, and um, we can help manage it as long as we can, but it is nice to have flexibility as a trustee to say when it's not working, that the asset could be sold and split amongst all the people at that point, millennial descendants.

SPEAKER_01 19:30

This is always a a real uh interesting counseling point to to share the fact uh with clients that just because all the kids seem to get along from your perspective doesn't mean that when you're gone, uh that they're all gonna get along. And I sometimes use the analogy of a pocket watch. And if you you take out your pocket watch and you flip it over and you take off the back, you're gonna see springs and sprockets and all of the workings that are inside there. And that's kind of like the family and the big sprocket that's kind of holding everything together, that's your matriarch, that's your patriarch. And you you take them out of that picture. What happens inside of that? And I just have this visual of springs and everything flying all over the place. What kind of tools are available for for you as a trustee to maybe resolve that?

SPEAKER_00 20:21

We

Mediation and TEDRA Tools

SPEAKER_00 20:22

are appointed successor trustee a lot when somehow one family member has been appointed as the PR, the successor trustee. And you're exactly right, when the matriarch or patriarch are both are gone, it very often does not work because one person now has power over things and and old resentments do come up. So you're you're absolutely right there. You know, when we and when we have a group of beneficiaries, you know, we try to always be fair, you know, assuming they have the same interests. And so we had one not too long ago where the trustee was in charge of all the personal property in the house. And you know, we could just say, hey, let's just you know, call up a charity and take it all away. But you know, there's things of sentimental value and things that matter. And the family said, Hey, you know, well, we want to get some things because these matter. So we ended up making a whole system for the family because they wanted to go in. And we took out the things that were of real, real value, you know, jewelry, a few antiques, things that needed to really be part of the estate, but the taperware and the lamp and the little you know box that mom kept her earrings in. We said, everyone gets to go around and pick. You know, we're just gonna go around and around until you've all got your things, and then when you're done, you can stop. You know, you don't have to keep going all the way down to the you know, the collection of plastic forks under the sink. But we mediated and you know, everyone did pretty well, and everyone got to. I think we drew some we drew straws to kind of figure out some that. Way to figure out who got to go first and then just kept going around and around until everyone had had their turn. And so, you know, it's time consuming, but having a neutral party there who could direct it, helped keep the peace, and every one of the children got to take their turn and pick out something that mattered to them. Um, if they had been left to their own devices, it probably would have been a complete free-for-all and everyone fighting over things. So there's practical things we can do. Sometimes, of course, we do when when the beneficiaries are all in a disagreement about trust terms or that you know, money should have gone out one way, or mom or dad meant you know meant to do something else, we of course take advantage of using Tedra quite a bit to settle disagreements. And as long as it's reasonable and within the grantor's intent and all the beneficiaries agree, often we can use that to settle things that come up during those processes. And it's wonderful that we have that because there are times where everyone is in agreement. You know, yes, if grandma and grandpa had known that there were going to be three more grandchildren, you know, they would have added them. They wouldn't have just left it to the other four who were alive when they were alive. And so for things like that, it is really great to be able to help and help fulfill the intent.

SPEAKER_01 23:15

We've been talking about some conflict here, but uh really I think a a trust that might be a long-term trust or trust that's going on for a beneficiary, there may be a lot of reasons why that's put in place and that are very valid and we want them there. And the ideal situation is going to be really, I think, the trustee and the beneficiary are really in a partnership. They need to work together. That's what's really the in the best interest of the beneficiary. Can you speak a little bit to

Trustee Beneficiary Partnership

SPEAKER_01 23:45

kind of the ideal partnership relationship between a trustee and a beneficiary? And if I had the opportunity as the attorney to train that beneficiary to be a better beneficiary, what would you want me to do?

SPEAKER_00 23:57

No, that's that's a good topic. And we really we always talk about collaboration. I mean, at the end of the day, right, the trustee holds duty and the liability, so we, you know, we do have to hold that, but you're never going to get very far with most people in life if you don't have a good dialogue and good communication and good collaboration. I mean, it's the same with beneficiaries, and and part of it is learning. You know, a lot of people have never been beneficiaries before. So what does that mean? Does it mean I can just call up three times a day and get money? Well, no. What it means is we're gonna make a budget and we're gonna figure out how much you need every month. And depending on the trust language, we're going to have an allotment come out to you every week to pay for you know the things you need to pay for. Um, if something, so you want to go on a cruise with your friend and that comes up, call us. You know, that's gonna be a one-off and we'll talk about it. So a lot of what we do initially is talking about how how do you get money out of the trust? And then just really trying to be a proactive trustee and not a just a reactive trustee. So making sure that at least annually we're checking in with our beneficiaries and saying, hey, is your budget still the same? Is your cell phone bill the same? Do you have any trips planned this year? Any changes in your medical condition? Um, and because of our unique position, you know, we we do help with other things. Uh, we have clients who might have a uh revocable living trust, and we are appointed as successor upon their incapacity. Uh sometimes we serve as co-trustee with them during their life, and then we get to know them. I think that is a great thing because you get to know your trustee and develop trust in them and they get to know you. And then when you unfortunately uh are incapacitated, the trustee continues. We help people get their dogs to the vet. We help arrange for roof cleaners to come and we we do the regular producer management of residential real estate, but we really are trying to be proactive and make sure that person's needs are met. If they need a home health care manager, we'll help get that arranged. If they need help finding a new CPA for their 1040, we'll do that. So there's a lot of real personal services in some trusts. There are some where it's mandatory income four times a year. We have a good relationship with them, you know, we keep them informed, but there's not a lot of the day-to-day health. The special needs trust world and settlement trust world is another one of those where there's a lot of hands-on service just due to the fact that the majority of individuals who are having a special needs trust funded for them have not had a lot of wealth before. And so that's a whole new learning curve in educating them about being a beneficiary, educating them about investments and investment management, and sometimes just how to how to how to life, I'd say, you know, they haven't owned homes, they haven't had cars, and so really helping them as much as we can to be successful individuals out in the world, but always explaining. I said if we ever say no, sometimes we have to, but you need to explain the why. And I think that gets down to just communication being the most important thing when you're working with a trust beneficiary.

SPEAKER_01 27:13

Yeah, I I think that that communication has got to be key with the beneficiary. I know that I'm I'm working with the uh, you know, the grantor, and we're putting this together and we're talking about using a professional company. Um, you know, one of the realities we want to make sure they think about is is well, wait a minute, you know, your your estate is worth six million dollars or something, and and your kids are in their uh mid-20s and they have zero. And so going from zero to six million of management and responsibility is a huge leap. Let's kind of build a system there that that helps uh helps kind of get get us past that that that phase where they're they're needing to kind of, as you say, it adulting or growing or or learning all of the features of of having assets. And so and that's the kind of thing that you can do with it from your perspective, then as a beneficiary. I mean, you're just you're doing that, and then at some point it might be time to either make a distribution or turn the trust over to the beneficiary if that's the way that it's drafted. And uh, and that's kind of a almost a mentoring role that you would have for the beneficiary.

SPEAKER_00 28:19

And we see parents do that. They maybe start doing some gifting for state planning purposes and they put relatively small amounts in for their kids, and then their age termination provisions. So say when they reach age 35, maybe 50% of the trust goes out to them, and so on and so forth. We try to advise, have it done by your mid-40s. We do have a couple where it's uh control from the grave, and that the grantor said their children couldn't have it until they were 75 and 80. So um we're there's there's a point where if you haven't learned how to manage money, I'm not sure another 40 years is going to help.

SPEAKER_01 28:56

That's that's that's absolutely true. You said something there that I I really want to explore a little bit further. And that was where you were talking about being a co-trustee

Planning for Incapacity

SPEAKER_01 29:06

with actually the grantor of the trust, you know. And I think this is so important. Dementia, Alzheimer's, these are things that can happen. And this can cause really for us to lose some of our faculties as we're kind of going along. So we were talking first here a minute ago about the kids, the young children, as as they're kind of gaining that that that skill set and then recognizing that, yeah, we also may lose that skill set. And this this client was uh unfortunately this ran in her family. And so she knew about what age it was going to start to happen and how long it was gonna last and what that situation was going to be. And so she very much was looking to establish the situation with a trustee other than herself to start off with those a co-trustee and then kind of uh you know, have a whole transition plan on how to move into this. And that's just just such, I mean, it's so wise really to think about that and to know that about your own situation, uh, to seek out and and build that in the initially there. Uh what you were talking about was great. You know, then you get to know the know them, you get to understand them. Um, we often will try to write draft in some very specific provisions about you know what is important and what's not important. So those are you know interesting conversations I have when we're drafting some of these documents. At some point, uh, I would imagine your your co-trustee is no longer able to serve, and and hopefully they recognize that themselves. But do you have to take action then at some point where you're gonna say, well, we're gonna have to have you step down or we're gonna have to remove you actually as a co-trustee?

SPEAKER_00 30:40

It's this is one of the hardest situations, you know, because often these co-trustee grantors have been very successful business people, you know, amassed uh funds, run companies, had careers as doctors and lawyers, and you think, wow, you know, such smart people. And so it can be very, very hard for them to let go. And we get it. I mean, you think about that, you have run your whole life and you have kept things going and you've done all the things yourself, and you know, now can am I really at that point where I cannot do it? And unfortunately, it is it does happen, but it is more uncommon that someone will have that self-realization completely and step down. And I think it it has a lot to do with our sense of self, you know, to admit that is really painful. Um, and so I think you know, it's and the more often course we do have to take, and this is one reason I always want really good language regarding determination of incapacity in a DPOA or in a trust, so that there is a way that is disciplined and objective that incapacity can be determined. As a trustee, we're often working with the medical power of attorney to help get that determination made because they have the ability to talk to the doctor or the grantor and to get that letter written and talk about what's going on. And it happens a lot. Um and it is tough because you sometimes have people have so much capability still, but they're making really bad decisions with their finances. You know, they start giving away money. One of the things, and I think having a client like you had who's planning in advance, I mean, in a perfect world, everyone would, you know, at some point say, Okay, I really want some protection. I'm gonna put my everything in my revocable trust. I'm gonna have a co-trustee. I'm gonna get to know the co-trustee, and that those assets, even well, the person, you know, maybe they're they have capacity, but it's it's declining. There's still some protection. The hardest thing is when people have never done estate planning and everything is outside of a trust. And let's say we're brought in as durable power of attorney, we can guardrail people, but if they haven't been declared incapacitated, they have access to all of their money if it's all still outside of a trust. And so I would say, you know, if one could step back in their 50s and 60s and say, boy, I want to protect myself from myself when I'm older, you know, you would make sure that the things that you could access, you know, as a slightly incapacitated individual as you age were more limited. Um, people don't always do that, and it's it's hard to give up the control. But that those are the best situations we see is when people have done estate planning, everything is in the trust, and maybe there's a checking account or something outside of the trust that you know isn't such a concern if they're in that state where they they're not quite fully incapacitated, but they aren't always making the decisions that they would have made 20 years ago. As a practice, I was gonna say, as a practice tip too, when you're advising people, don't appoint your contemporary, your neighbor who is your same age as your power of attorney, because we've had more than once where we're like, oh, where's the power of attorney? And they're in a nursing home, incapacitated themselves. And so I always say, like, name two. And one thing we see frequently too, which is a real difficult thing, is people will name one and sometimes it's a financial institution, and then the financial institution doesn't exist, and there's no way to appoint a successor, and there's no successor, and so at that point the real option then is guardianship or conservatorship, and people are trying to avoid that. So I'm a big fan of two, maybe three, um, and make sure there's a mechanism by which you a corporate producer or an attorney or someone else could be appointed if the the professional organization you've picked is not able to serve.

SPEAKER_01 35:15

That's a fabulous point. And I and actually it's a it is really an it's a drafting point. And so you're kind of uh something that we'd want to make sure it gets put in there. I know I've had a situation where the named successor, and I think it was under the the will and under the trust, um was like, oh, this account's too small. We don't want to take this one on. And uh and we were at a stuck

Drafting Tips and Flexibility

SPEAKER_01 35:40

spot then because at that point it's like, okay, and there's no one else listed, and there was no mechanism to appoint a new one in the document itself. And and so we had to end up going, you know, to state law. And actually that one, when it was in another state, it was in California, so I had to, I got to hand it off to someone else to kind of deal with that end of it. But it but it became a real issue, and and and it's a drafting issue, and on, you know, hey, if you know, just because this is your bank doesn't mean that they're necessarily going to be willing to serve as your trustee. Uh so really think about that, about who you're naming as a trustee from that perspective.

SPEAKER_00 36:15

And include a way to appoint someone that doesn't hopefully involve having to go to court and spend a lot more money, you know, effectuating that.

SPEAKER_01 36:23

So since you've kind of provided us a great drafting tip here for for the attorneys and some really some great guidance for the attorneys, uh, let's kind of think back to the other side of it. If you had the one point, the one thing you would like to say to someone who's just setting up their estate plan, um, and it's like, hey, this is what you should pay attention to. What would you tell those uh those you know, those potential clients for attorneys out there what they should really know or focus on?

SPEAKER_00 36:51

So I'm definitely always gonna say, make sure you revisit your plan at least once every 10 years because things change, your life changes. Recently, my cousin let me know, she has been divorced from her ex-husband for 25 years, that she is now her his power of attorney. And she's a good sport and a caring person, so she is doing the role, but not exactly probably what either party intended. So from your deep from your powers and attorneys to your trust to your wills, get them checked out, make sure it still does what you want it to do, and it still comports with the ideas that you you know had at the time. As you're working with an at with your attorney, it's really easy to want to try to ratchet things down and control a situation. You know, you have a kid who's like working on adulting, but maybe struggling. Maybe you have a child with drug use, and you're like, I don't want the I don't want for your child who's struggling to adult, you know, only give them money if they have a job, or you have a kid who's using drugs, you know, only distributions come out if they're absolutely clean. And what that does though is it puts the trustee in a really challenging position and probably doesn't actually effectuate what you want. Do you really want us not? I mean, do you want your child to be homeless? Or would you prefer you give us the discretion to meet basic needs during that time? If we can't distribute any money for the child who's maybe, you know, unfortunately has a drug addiction, we can't pay for drug treatment. So, or if you put in there, you know, this age, if they're doing this, they get this, this age. I mean, sometimes the other day I was looking at trust Dr. Viccoling. The distribution schematic was so complicated. All both of us have law degrees, both of us have been in the fiduciary business. We could not figure out when we were supposed to distribute money to these beneficiaries based on all of these things being met. We had to make a big graph and say if you know Joe does this and he gets money, but if he does that, he doesn't get money. So I think one thing they say, pick a trustee that you trust. Start with that, but then give the trustee discretion because people's life situations change. You know, your child who's hardly adulting now maybe is a successful business person, the beloved um caregiver you have right now that you want to leave a hundred thousand dollars to, do you really want to do that? Or do you want to, you know, allow the trustee to make some gifts for you at some point, you know, based on what you tell us you'd like to do, or do you just want to set that in stone? Um, do you want the beneficiaries to only get 3% a year forever? And you know the beneficiaries will see that number and say, hey, that's what I get every year, even if it's discretion. And so I think that's the one thing I've seen over time is it comes from a good place. It comes from wanting to create structure for people you care and know about, but it can create unintended consequences down the road.

SPEAKER_01 40:19

That last one was uh it's a fabulous one to to kind of get into and really think about because uh one of the things we always try to do is we try to, you know, say, hey, we're we're planning for today. So if something were to happen to you today, you know, what what how should we have it drafted? But we're also planning for X number of years in the future. And then, you know, it's almost like you're the Nostradamus or something, you're trying to forecast where we're going to be and to realize, you know, if this document is gonna be in place for 60 years, 80 years or something, it's gonna be around for this, you know, this person's life and maybe the next generation some too. There really can be a lot that's gonna happen. And so we, as a on the counseling side of it, we gotta say, okay, let's let's look at our provisions and let's kind of really get in there and say, okay, how can we undo this? How can we make this more flexible? How can we add in you know limitations on some of these things that may seem like they don't they they make sense now, but they may not make sense in the future. And I think, you know, kind of going bringing it full circle, we'll go back to our family cabin. Yeah, you know, if that's not working out, you know, maybe it works out for the for the the next generation, but you know, at some point it's not going to work out. If we don't have the language in there or the option in there, or to have some kind of resolution for that, um, it's going to fall to disrepair, it's going to create uh division among the family, it's going to create all kinds of problems. So you you have to contemplate, you have to contemplate the other, you know, the other option happening at some point, and that has to be kind of brought in.

SPEAKER_00 42:02

A perfect thing when we can collaborate with clients, their attorneys, and the and us as trustee in the drafting stages so that we have a good document going forward and the wishes of the clients truly do get fulfilled as best we can. Um, I always have a magic eight ball on my desk just in case, you know, if we really need help figuring out what to do, you know, I pull that out. But I try to avoid that as my general advice giver.

SPEAKER_01 42:27

Well, Allison, this has been fabulous. I think I could probably chat with you for quite a while on all these subjects. Um, but this has been great. I really appreciate you coming on today and sharing all of your expertise over the you know the last 18 years of being in this trustee world, and uh it's just been great. Some great stories, you know, um, and uh and really some great tips too. I really appreciate it.

SPEAKER_00 42:49

Thank you so much.

SPEAKER_01 42:52

These are hard issues, they take conversations, but you need two for conversations. Who do you need to have a conversation like this with? The best way to get started is to send them a link to the show. Please rate and review wherever you are listening to this podcast. Subscribe to stay up to date with our latest episodes. I'm Derek Jensen, and this podcast is presented by Jensen Estate Law.