The LegalEdge approach to planning is based on the a proven framework in which any given fact pattern is assigned one of seven planning profile within three different models. Each profile determines the correct legal documents and provision within each document to conform to the objectives of the profile. User input from an easy-to-use online form is analyzed by a proprietary legal algorithm to identify the appropriate legal document.
The three models, referred to as “Money Models” are: Estate Transfer, Asset Protection, and Family Wealth Building.
The rest of this article summarizes the Estate Transfer Planning Profile in its most elemental components.
Base document: Grantor Trust
Grantor trusts are often called “revocable living trusts”. These trusts are said to be “living” because they are created when the trust creator, i.e., the “trustor” is living. Most trusts are created while the Trustor is living but are categorized as “irrevocable.” This is unfortunate because most, if not all, jurisdictions allow the revocation of all trusts, to include irrevocable trusts. This occurs pursuant to nonjudicial orders as contemplated by the Uniform Trust Code or state statutes that are alternative state statutes such as Washington’s Trusts and Estates Dispute Resolution Act. For comparison of TEDRA and UTC, read our analysis.
Less expensive alternatives:
Transfer-on-Death Deed, Community Property Agreement, and Beneficiary Designations.
NOTE: Living trusts avoid probate as do the less expensive alternatives. As of June 2024, the app does not inquire as to client preferences as to the probate avoidance strategy, leaving that to counsel to discuss individually with the client.
The app creates Quit Claim Deeds, Transfer-on-Death Deeds, and Personal Representative Deeds
Scenarios:
Fact patterns that align with Estate Transfer Simple are ones in which the client is single or a surviving spouse, with low net worth, and means to finance long-term care, e.g., long-term care insurance, VA eligibility for care ,family support, or high regular and recurring income. Typically, there is a real estate parcel, usually a personal residence and non-complex assets with a total value that is less than $1 million dollars.
How it Works:
This profile creates a living trust, summary of trust, trust certificate, relevant quit claim deeds, instructions, and ancillary documents. Notices are sent to relevant parties and the work product is delivered to drafting attorney via email.
NOTE: As of June, 2024, the delivery method is email.
Benefits:
A living trust provides a financial framework for retitling assets into the name of qualified beneficiary when the trustor dies. It also integrates well with the disability plan as outlined in the financial power of attorney and the health care documents.
The drafting app creates these documents effortlessly and, if deployed correctly, are delivered to the attorney before consult with the client. If retained, the drafting attorney may revise the documents as easily by opening an attorney-specific interface and toggling various settings. This reduces time and expense with the goal that the attorney has more time to spend with the client.
Cons:
Living trusts avoid probate and also avoids the creditor claim process of probate, too. As of June 2024, the legal algorithm does not inquire into the client’s current liabilities or their desire for finality of creditor claims. The client questionnaire does inquire into the risk profile of certain occupations and assigns those occupation-specific fact patterns into one of the asset protection or family wealth building profiles.
