I believe in the importance of making general legal concepts accessible to my clients. While nothing can replace working directly with a qualified attorney, clients should be involved in the process on a macro level in order to make the best decisions for themselves and their families. However, lawyers often struggle with explaining complex legal concepts to non-attorneys in an easy-to-understand manner. Clients often leave meetings with their lawyers scratching their heads and quoting Lord Byron from Don Juan: “I wish he would explain his explanation!”
My latest project, Lawyer Playbook, LLC, is designed to alleviate this confusion by helping clients understand basic legal principles so that they can be better prepared to work with their lawyers to accomplish their goals. Just as coaches and athletes develop, learn, memorize, and refine certain plays to be utilized in certain situations, lawyers have “legal plays” to apply to their clients’ circumstances in order to carry out their wishes. The Lawyer Playbook, LLC website, www.lawyerplaybook.com, features a series of videos that explains common legal plays. Below is a description of a few of the plays that are shared on the website.
Play # 1: What Is a Living Trust?
The first video on www.lawyerplaybook.com describes the most common estate planning play, the Revocable Living Trust. The video includes explanations of the parties involved in a Revocable Living Trust such as the Grantor, the Trustee, and the Beneficiary, how the three parties interact with each other, and how the parties and their roles can change over time due to specified circumstances. The video also explains how the Revocable Living Trust can help your family avoid the unnecessary expense and delay of a conservatorship in the event of incapacity and a probate upon death.
Play # 2: Trust Funding
The second video on www.lawyerplaybook.com describes the importance of “Trust Funding.” The key to any trust is to make sure that title to assets has been changed to the trust. In many cases, without proper Trust Funding, many of the benefits of a Revocable Living Trust – including the avoidance of conservatorships and probate – will be defeated. The video explains what assets belong in the trust, what assets are controlled by separate beneficiary designations, and how to make sure that your Trust Funding is up to date.
Play # 3: Common Pot Trust
When is equal not fair? On the surface it makes sense to divide your estate into equal shares for each of your children. However, when there is an age gap of a few years between the oldest child and the youngest child, it might not be fair to the younger children to divide the estate into equal shares right away. The Common Pot Trust is a popular legal play that addresses this issue. The third video on www.lawyerplaybook.com describes this concept and the circumstances in which it would be effective.
Play # 4: Beneficiary Controlled Trust
Comprehensive Estate Planning is about more than simply avoiding conservatorships and probate and mitigating taxes. In this age of frequent litigation and high divorce rates, protecting beneficiaries’ inheritances from lawsuits and divorce (“creditors and predators”) becomes a paramount concern for many clients. The fourth video on www.lawyerplaybook.com describes the concept of a Beneficiary Controlled Trust and how it can provide additional protection that traditional “outright gifts” do not feature.
Play # 5: Step Up in Basis for Capital Gains Tax
Capital gains tax is a tax on appreciation of certain assets, often real estate and securities. Understanding the concept of the “step-up in basis” can allow you to plan your estate in such a way to substantially mitigate or eliminate capital gains tax for your loved ones. In Community Property states such as California, couples can take advantage of a special quirk in the law by changing title to Community Property from Joint Tenancy. The fifth video on www.lawyerplaybook.com explains these concepts and how your attorney can incorporate them into your estate plan.
It is essential to understand that these lessons are by no means a viable substitute for the proper personal counsel of a licensed attorney. Nevertheless, I encourage you to visit www.lawyerplaybook.com to become generally familiar with key legal concepts in order to prepare you to work with your attorney to accomplish your goals.
KRASA LAW, Inc. is located at 704-D Forest Avenue, Pacific Grove, California 93950 and Kyle may be reached at 831-920-0205.
Kyle is also the founder of Lawyer Playbook, LLC. For more information, please visit www.lawyerplaybook.com
Disclaimer: This article is for general information only. Reading this article does not establish an attorney-client relationship. Before acting upon any of the information presented in this article, you should consult an attorney who is licensed to practice law in your community.