“It takes more than good intentions to create a valid trust.”

So writes Phil Bernstein of The New York Probate Litigation Blog… His funny-if-it-weren’t-true post could also be called: “Make Sure everyone involved in your estate plan understands whats going on!”

Ok, so maybe that’s a little long-winded but I think it works:

Lucy Fasano executed a trust agreement naming her sister Anna as trustee and her children Ralph Fasano and Lucille DiGiacomo as beneficiaries. The trust agreement designated Lucy’s home as the trust corpus and she actually did execute a deed transferring the property to Anna as trustee. That, however, is where the wheels came off, beginning with Anna’s failure to sign the trust document .

Brilliant!

Apparently, after Anna received a property tax rebate payable to her as trustee, she re-conveyed the house back to Lucy who subsequently conveyed the property to her daughter, Lucille . This turn of events prompted son Ralph to bring suit for a judgment voiding the conveyance which Lucy had made to her daughter. DiGiacomo countered with a request that the court declare the deed valid and the trust invalid.

Skip ahead a little and we find the appellate division upholding the lower court’s decision to do just that – invalidate the trust (Fasano v. DiGiacomo, (2008) 853 N.Y.S. 2d 657).

The point that Mr. Berstein makes expands on one that I have made here before… Not only should you fund your trust, but for god sakes, no, for your beneficiaries’ sakes, fund it properly. Talk to your lawyer about what needs done to pass property to it or to safeguard/deal with property already in it.

Many of these problems can also be avoided by my favorite part of the planning process: Putting the whole family in a room together and talking about it.  I know this can’t happen all the time, either because of certain vexing family dynamics or other sundry situations, but its worth doing if it can be done… ALso, for the lawyer it usually results in more work coming through the door as you (the attorney) are able to say to the non-clients in the room: “Hey, how’s your plan?”

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