Earlier this week, I wrote about ways Taproot Law can support unmarried couples with estate planning kits. Our latest Green Space article features Amanda Knaffla, J.D., CTFA who is the Chief Trust & Wealth Management Officer at Range Bank in Marquette. Amanda is also an attorney who previously practiced in the area of estate planning. I interviewed Amanda to better understand how other professional experts can support unmarried couples and their estate planning goals. 

Erica: In what ways do you work with unmarried couples? 

Amanda: 

We work with some unmarried couples to plan for their financial future and to assure that should one or both become incapacitated or pass away their affairs are handled as they desire via their estate plan. While we don’t actually draft estate planning documents, we will work with a client’s attorney to assure documents are in place to deal with issues that may arise. At the same, we’ve noticed that this is an area that unmarried couples overlook until some event occurs (usually a crisis), and these matters are brought to their attention. 

Most people think if they’ve been together for a long time, or they live together that they will be able to make decisions for the other person (medical, financial etc), or if they live together that they are entitled to a portion of the other person’s property but unfortunately this is often not the case and people may not realize it until it is too late.  In these circumstances careful planning is a must.

Erica: What is a trust and when should an unmarried couple consider a trust?

Amanda:

Put simply a trust is a legal document/agreement that an individual creates (the grantor) that lays out how assets are to be managed during life and after death. When a person has a trust it basically creates a container that holds their assets. 

The most common type of trust you would see for unmarried couples is a revocable trust.   

Unmarried persons will often utilize a trust to assure that their wishes are followed. For example:

• If an unmarried couple wants to assure their partner receives all or a portion of their assets they can indicate that in the document. 
• They can indicate what is to happen with their home and if they want their partner to be able to live there. This can be a very important issue if one partner has ownership of the home. 

There are many benefits to unmarried couples using a trust:

• If they want their partner to be able to make financial or medical decisions if they are not willing or able to, they should have medical and financial powers or attorney in place naming that partner. 

• If they do not have a trust and they want their partner to receive certain assets they should consider naming them as a beneficiary. 

 Erica: When should an unmarried couple consider a professional trustee?

Amanda: 

A professional trustee, such as a bank, is great if a person seeks to eliminate conflict. It takes the burden off the remaining partner, a family member, or friend who would be put in a position to deal with potentially difficult situations and people.  The corporate trustee handles any potential, and because they are a neutral party, they are able to follow the document and ensure the deceased person’s wishes are carried out.

 A corporate trustee can also provide expert administration. They know exactly what needs to be done to properly distribute assets and close out the trust, which can include selling assets, filing taxes, and ensuring everyone who has an interest in the trust receives all documentation they need. Essentially a professional trustee eliminates a large amount of hassle for those left behind.

Consider the following scenario:

While a person is a alive:

Typically, a living person is able to handle their own affairs and be the trustee and manage their own assets. They are still able to use and enjoy their property. 

If this person becomes unable to handle their affairs or passes away: 

Typically this person appoints a successor trustee, which is usually where we come in by serving as successor trustee.  If a person is alive and they can’t manage their affairs a successor trustee will use trust assets to make sure the property is cared for, needs are met, bills and taxes are paid etc.  

When the grantor passes away, the successor trustee makes sure assets are collected and distributed according to what the trust indicates and assures all final business is handled. This is typically done without probate court involvement so there is less opportunity for challenges and it is a more private process.

Thanks, Amanda!

I’ve been busy rolling out new services to meet your needs and meeting with people like Amanda in the community, in addition to hosting workshops and talking with colleagues on Ask the Lawyers. I’m so excited about how Taproot is building out our services and outreaches to meet the needs of folks throughout the community. Stay tuned for so much more and reach out if you’d like to use our legal services or collaborate in the community!