A new business of even a modest size is bound to have some interaction with an attorney. When disputes arise, the attorney-client privilege can become an important question in business litigation. If you’re beginning a business, it’s important to understand how attorney-client privilege works in the context of business. It’s also important to be aware of recent developments in the law in North Carolina bustiness-related attorney-client privilege as stated in the Technetics Group Daytons, Inc v. N2 Biomedical, LLC case from late 2018.

Attorney-client privilege in North Carolina

Understanding attorney-client privilege for business matters in North Carolina begins with understanding the basics of the attorney-client privilege. The attorney-client privilege prevents the attorney from disclosing things that the client tells the attorney in confidence in the course of litigation. North Carolina’s rules for attorney-client privilege are found in Rule 1.6 of the North Carolina Rules of Professional Conduct.

In addition, the United States Supreme Court has long acknowledged the public importance of the attorney-client privilege because it allows clients to fully communicate with their attorneys in a way that allows the attorney to efficiently represent the client and provide sound advice. As a matter of public policy, courts have ruled that the benefits of open communication between lawyer and client outweigh the loss of relevant information when a dispute arises.

The privilege belongs to the client and not to the attorney. The client must consent to the waiver of information. Any kind of expression by which the client conveys information to the attorney is covered by the attorney-client privilege. The privilege extends to agents of the attorney but doesn’t extend to facts or information obtained from independent sources.

Communications from third parties also aren’t privileged. Also exempt from privilege is the fact that the client consults with the lawyer, the date of the consultation and the identity of the lawyer.

North Carolina’s attorney-client privilege for business matters

In any business relationship, agents speak on behalf of the business. So it makes sense that the attorney-client privilege extends to certain employees or representatives of the business. The question becomes to whom the attorney-client privilege applies. To put it another way, who from the company is a representative of the company such that attorney-client privilege applies to communications between the individual and the business attorney?

The answer to the question depends on the facts of each case. In addition, the guidelines for determining whether an individual is a representative of the business continues to grow and change. The General Court of Justice Superior Court Division recently offered some insight in its ruling in the Technetics Group Daytona, Inc v. N2 Biomedical, LLC case.

North Carolina’s Technetics Group Daytona, Inc v. N2 Biomedical, LLC case and attorney-client privilege in business relationships

At issue in the Technetics v. N2 case was the creation of a patent through mutual agreement between the companies. Although the two companies had a cooperative working agreement, they disagreed about who had the legal rights to the patent created as a result of the work. Technetics sought to obtain documents that N2 claimed were protected by the attorney-client privilege. The documents involved communications between an independent contractor working for N2 and the attorney.

Technetics argued that because the communications involved an independent contractor rather than an employee, the communications could not be protected from disclosure by the attorney-client privilege. N2 argued that the contractor acted in the place of an employee, that the communications were necessary for effective communication between the business and the attorney and that the business and the contractor had a common legal interest that extended the privilege to the contractor’s communications. The court sided with Technetics on all of these issues.

Does attorney-client privilege extend to consultants in North Carolina?

The North Carolina court rejected these three arguments when ruling that attorney-client privilege did not extend to the independent contractor in the Technetics v. N2 case:

1. Functional equivalent argument

Until the court ruled in the Technetics case, North Carolina didn’t have a test for when a representative counts as an employee for the purposes of the attorney-client privilege. N2 argued that the contractor was essentially an employee of the corporation. While it’s true that some federal courts extend attorney-client privileges to non-employees like accountants, the court ruled that the contractor in the case didn’t meet the standard to qualify as a non-employee contractor.

The court ruled that the standard is whether the individual is the functional equivalent of a person with primary responsibility for a key corporate job. Among the questions is whether the individual is likely to have information not possessed by anyone else at the company. The court ruled that an independent contractor like the person at issue in the Technetics case didn’t meet this high standard.

2. Necessary communications argument

The next argument that the North Carolina court rejected was the Kovel doctrine. The doctrine states that a third party’s communications are privileged if they’re necessary for the attorney to provide effective services to the client. The court rejected the argument in the Technetics case saying that the third party’s involvement must be more than just convenient. Rather, the third party must have indispensable information or a specialized purpose in being present at the communications.

Essentially, the third party must be more or less an interpreter to explain technical information to the attorney or the client in order to make the attorney’s representation effective. The court ruled that the N2 independent contractor was not necessary to make the attorney-client communications effective for the business.

3. Common interest doctrine

The common-interest doctrine says that when the client and a third-party have a common legal interest or endeavor, communications may be privileged. The privilege may apply whether the business and third party have the same or different legal counsel. The purpose of the common interest doctrine is to allow parties to share information freely in order to build their respective cases.

However, the court ruled that the independent contractor in the N2 case didn’t have any legal interest at all. He couldn’t possibly have had a common legal interest with the business because he had no legal interest in the subject matter of the litigation. The court rejected N2’s assertion of the common interest doctrine and all of the proposed assertions of attorney-client privilege based on the independent contractor’s relationship with the business.

Attorney-client privilege and North Carolina corporations

In the age of contractors, micro-task workers and other limited-service relationships, it’s important to understand that attorney-client privilege has its limitations. Communications between non-employee workers and company attorneys may not receive the benefit of attorney-client privilege.

In addition, even employee communications may not be subject to privilege depending on the role and rank of the employee making the communication.

When you’re starting a business and running your business, it’s important to understand that the attorney-client privilege is not without its limitations.

Our qualified North Carolina business attorneys can help you understand best practices for handling sensitive information and protecting your business interests and all stages in the life of your business.

Did you know that the federal Internal Revenue Service (IRS) and the North Carolina Department of Revenue (NCDOR) don’t always have to give you notice before they can take your property? Sometimes, the tax authorities can take your property without any notice at all. When the tax authorities seize your property without notice, it’s called a jeopardy assessment.

There are strict rules that apply for when the government can seize property through a jeopardy assessment. There are also rules that allow you to challenge the assessment and demand return of your property. Here’s what you need to know about jeopardy assessments from our North Carolina tax dispute attorneys:

What is a jeopardy assessment?

A jeopardy assessment is a special tax liability that occurs without notice. In cases where the government taxing authority believes that a person is actively taking steps to conceal assets in order to avoid a tax levy, they may immediately seize assets. A person who faces a jeopardy assessment may challenge the assessment including asking for a hearing in front of a judge.

How does jeopardy assessment work?

When a person has an outstanding tax liability, the government may seize their assets in order to collect the tax liability. Both the IRS and the North Carolina Department of Revenue allow for jeopardy assessments in certain situations. If the tax authority believes that it’s necessary to seize assets without giving notice, they may use the jeopardy assessment procedures and take the property immediately. The tax authority may dispose of the property to satisfy the tax debt after a waiting period.

How do I know if a jeopardy assessment reasonable?

In order to make a jeopardy assessment, the taxing authority must have reasonable, objective facts that the person is taking steps to conceal property or planning to conceal property. Preparation to leave the United States, transfer of the property to a third person, attempts for the taxpayer to render themselves insolvent or attempts to take any other action to evade tax collection may justify a jeopardy assessment. Here are just some of the considerations that a tax assessor may rely on to determine whether a jeopardy assessment is reasonable:

• Whether the debtor does business using large amounts of cash
• Low reported income tax compared to the amount of cash in the taxpayer’s possession
• Dissipation of assets
• Assets available for tax seizure
• Use of aliases that may make it harder to find the taxpayer or find what assets belong to them
• Using multiple addresses that make it harder to find the taxpayer
• Whether the taxpayer provides necessary financial information on their tax documents
• A history of criminal behavior and whether there is evidence that the taxpayer has participated in illegal activity
• A history of overseas asset concealment
• Recent property sales and transfers
• Transferring property to friends or relatives for less than the value of the property
• Transferring property during an investigation

The purpose of a jeopardy tax assessment is to allow the tax authorities to seize the property before the debtor can conceal or transfer the assets. The tax authority must defend the seizure on the basis that it’s reasonable under all of the circumstances.

North Carolina jeopardy tax assessment laws

North Carolina jeopardy tax assessment laws are found in North Carolina General Statutes 105-241.23. The law says that if the tax assessor believes that immediate collection is necessary to realize the collection of a tax, they may seize the property with no waiting period. Within five days, the Secretary must provide a written statement of the facts that they rely upon in order to initiate the property seizure.

The taxpayer has 30 days after receiving the notice to initiate a review. If the debtor requests a review, the Secretary has 30 days to issue a written decision withholding or rescinding their decision to seize the property. If the debtor is still unhappy with the decision, they may request a judicial review of the seizure within 90 days.

If the debtor chooses to challenge a jeopardy assessment in civil court, the debtor files their appeal in the Superior Court of Wake County or in the county of their residence. The court has 20 days to hear the appeal. The grounds for court review is whether the seizure is reasonable.

United States federal tax assessment laws

The U.S. federal tax assessment laws come from Internal Revenue Code §§ 6851 and 6861. The laws say that when the date has passed for filing and there’s a reason to question assessment of property, IRS officials may make an immediate assessment without the normal notice and collection procedures. In typical assessment cases without jeopardy action, the IRS must provide notice of intent to levy and a demand. The debtor may request a hearing. But when jeopardy applies, the debtor doesn’t have the right to notice.

The IRS may initiate a jeopardy assessment when a person doesn’t file or pay taxes or when a person understates their tax liability. There must also be a reason to believe the person is actively taking steps to protect their assets from lawful seizure. Within five days of the assessment, the IRS must provide notice of the assessment and an explanation of the right to review. The debtor has the right to appeal the decision for judicial review within 90 days of receiving the results of the administrative review. The question for judicial review is the reasonableness and appropriateness of the jeopardy assessment. The only issue available on appeal is whether the court based the assessment on the reasonableness of the seizure.

What to do if you’re facing a jeopardy tax assessment

Are you facing a jeopardy tax assessment in North Carolina or from the IRS? You can fight the seizure, and you can also fight the underlying tax assessment. You must work quickly. You have only days from the notice of the seizure to fight back. One of the experienced North Carolina attorneys at Wilson Ratledge can help you evaluate your case and pursue all of your options. We can give you advice that’s unique to your situation and help you defend your rights under North Carolina and federal law.

If you’ve thought about making a will, you’ve probably considered using an online will form. Your friends and family may offer lots of advice and opinions about whether you should hire an attorney or use an online form. It can be hard to sort out the truth. Should you hire an attorney or use an online form to make your North Carolina will? Here’s what you need to know:

Should I hire an attorney or use an online form to make a North Carolina will?

Whether you should hire an attorney or use an online form to make your North Carolina will depends on your unique circumstances. Most online will forms are simple forms for simple situations. If there are any unique circumstances present in your case, an online will form is likely not enough to meet your needs and give you the confidence to know that your last wishes are properly represented in your documents.

Part of the problem with using an online will form is that you don’t know what you don’t know. You may think that you have a simple case, but there may be issues that complicate your case that you’re unaware of. Your best plan is to discuss your needs with an estate planning attorney.

You should work with an attorney for any kind of special situation

A simple will form is just that – a simple will form. It covers only basic situations where the person creating the will has few assets and has a simple plan for disbursing those assets. Here are just some of the situations that may make a will more complex:

• Divorce or second marriage
• Multiple children
• Sizeable estate (high net worth)
• Special needs children
• Items of sentimental value
• Disinheriting a spouse or a child
• Children younger than the age of majority

An attorney helps you understand how to create the best possible will for your particular situation. They help you determine how North Carolina law applies to your case and what you need to do in order to put your wishes into effect. When you work with an attorney, they can ask the right follow up questions in order to customize a will that suits your needs. Many family relationships today are complex. You and your family deserve a will that best represents your interests under North Carolina law.

Working with an attorney can help you avoid a will contest

Another reason to work with an experienced North Carolina wills attorney is to ensure that you take all of the steps necessary to make your will valid and enforceable. Each state has its own laws for making a valid will. There are things that you need to do in order to ensure that your will holds up in court especially if you’re deviating from the default rules for inheritance. When you have the help of a seasoned wills attorney, they help you through the entire process until you have a complete and valid will.

It’s not enough just to make a will. You need to make a will that can withstand a will contest in a North Carolina court. An experienced attorney gives you the assurance that you’ve taken the right steps in order to create a valid will that puts your wishes into effect.

Working with an attorney helps you take the complexity of laws into account

There are laws from many different places that can impact a person’s last wishes. Probate laws, gift taxes, inheritance taxes and more can all impact the best possible will for an individual. Laws comes from both state and federal sources. When you work with an attorney, you’re working with a trained and experienced professional who knows the different state and federal laws that may impact an estate plan. When you use an online form, you don’t have the personal help of a professional who knows what laws may impact the best decisions in your case.

Isn’t it a lot more expensive to use an attorney instead of a will form?

Online will forms often advertise a flat rate to complete a simple will. At first glance, it might seem like it costs a lot more to make a will with an estate planning lawyer. However, if what you need is a basic will, you may be surprised to learn that the cost to use an attorney is actually comparable.

For many people, a simple will is insufficient to meet their estate planning needs. A case with more than minimal complexity needs a will that’s personalized to their situation. In nearly all will preparation, you should also address things like last wishes, HIPPA authorizations and powers of attorney. These things may be even more important than the will itself. While these things may add to the cost, they’re also a critical part of an estate planning package.

In other words, don’t be fooled by the sticker price. Even though hiring an attorney may seem more expensive, it’s important to inquire as to what you’re paying for. You may be surprised to learn just how affordable will preparation with an experienced attorney can be.

Finding the right North Carolina wills attorney

All attorneys are not created equally. When you hire an attorney to create your will, it’s important to work with an attorney that specializes in wills and estate planning. With Wilson Ratledge, you have a team with the training, experience and technology to create a personalized will that thoroughly takes the law and your personal situation into account.

Even if you have a criminal attorney or patent lawyer, they may not be the right person to help you create a will. When an attorney specializes in will preparation, they know what kinds of things to pay attention to in order to create a will that’s effective and best tailored for your personal situation. Ultimately, we can provide you an affordable will and estate plan that meets your needs and fully and thoroughly accounts for North Carolina law in your specific situation.

When you have a trust, it’s important to understand how trusts are taxed. When you receive distributions from a trust, it’s equally important to know if the distributions are subject to tax. Trusts pay taxes in some situations, and some trust taxation laws have changed with the implementation of the Tax Cuts and Jobs Act. Here’s what you need to know about how trusts are taxed in 2019:

Different types of trusts are taxed differently

There are many different types of trusts. With the many different types of trusts come many different ways that trusts are taxed. When you start to learn about trusts and taxation, it’s critical to remember that each kind of trust has its own unique rules for taxation. If you create a trust or receive distributions for a trust, it’s important to get personalized, professional advice about the taxation of the trust. Likewise, if you’re considering creating a trust, it’s important to speak with a qualified professional about the tax implications of the trust.

Revocable and irrevocable trust taxation

The most basic way to understand trusts and taxes is to separate trusts into two categories – revocable trusts and irrevocable trusts. In a revocable trust, the grantor still owns the property in a trust. In an irrevocable trust, the property becomes a separate legal entity. In an irrevocable trust, the grantor no longer owns the property in the trust.

Trust taxes and revocable trusts

When a trust beneficiary funds their own trust and maintains control over the trust, the income from the trust is reported on the tax returns of the beneficiary. In a case of a revocable trust, the taxes pass through to the beneficiary’s tax return. There’s no separate tax return for the individual to file. In the case of a revocable trust, the taxes are carried over to the grantor’s individual tax return. The trustee uses Form 1041 – U.S. Income Tax Return for Estates and Trusts, but the taxes pass through to the grantor’s tax return.

Trust taxes and irrevocable trusts

For an irrevocable trust, the trust files its own tax return. The trustee must report all income even if the beneficiaries receive the income. Distributions that the trust makes to the beneficiaries are deductible from income that is subject to tax in the trust. The trust itself must pay taxes that it owes on income. Likewise, the individuals who receive distributions must pay taxes on the distributions. The trustee uses Schedule K-1 in order to detail payments to the beneficiaries so that the trustee, beneficiaries and the IRS are all on the same page about payments to beneficiaries and who owes taxes on the trust income. Beneficiaries pay different tax rates on different types of income like interest, dividends and capital gains.

Trust distribution classification for simple and complex trusts

A trust is a simple trust if it distributes all of its income to the beneficiaries. A trust is complex if it may not distribute all of its income to the beneficiary. When a trust is complex, distributions to the beneficiary come from the current year’s income and then from the trust’s principal assets. The distribution loses its character as income or principal upon distribution to the beneficiary.

Trust taxation and the Tax Cuts and Jobs Act

The 2018 Tax Cuts and Jobs Act brought significant changes to all income taxes including taxation of trusts. The law creates new tax brackets for trusts. There’s one set of tax brackets for income from a trust and another set of tax brackets for capital gains and qualified dividends.

The biggest difference between the two sets of tax brackets is that income tax has a much higher top tax rate than the top tax rate for capital gains and dividends. Income over $12,500 is taxed at a rate of 37 percent while capital gains and qualified dividends over $12,700 are taxed at a rate of only 20 percent. The difference is likely to keep taxes on capital gains in trusts in line with capital gains taxes for assets that are not kept in trust.

In addition to changes in tax rates, there are also rule changes that mimic the changes for non-trust assets. For example, state and local real estate and personal property tax deductions are limited to $10,000 per year. The rule doesn’t apply to taxes that come from a trust conducting business activities. In addition, a trust may no longer deduct investment fees and expenses or unreimbursed business expenses.

The net result is that taxes for many trusts are going to be higher than they would have been before the Tax Cuts and Jobs Act. However, a trust can still be an appropriate and financially beneficial legal and financial tool in many circumstances. Unless lawmakers extend the tax laws or make changes, the trust tax laws created by the Tax Cuts and Jobs Act expire in 2025.

But I thought the whole point of a trust is to avoid taxes!

You may have heard that creating a trust is an efficient way to avoid taxes. It’s true that a trust can be a good way to avoid inheritance taxes. As a way to transfer wealth from one generation to the next, a trust is an efficient way to shield assets from hefty estate taxes. However, a trust isn’t a way to avoid paying income, capital gains or dividend taxes. Beneficiaries of a trust can expect to still have these tax obligations when they benefit from a trust.

Understanding trust taxation

Taxation of trusts is complex. How a trust is taxed depends highly on the characteristics of each particular trust. If you’re involved in a trust as a trustee or beneficiary, it’s critical to understand the tax implications and obligations that go along with your role in the trust. It’s important to understand that taxation of trusts is not created equally. You must understand the type of trust and the types of income that you have in order to correctly determine how your trust is subject to tax.

Even though trust taxation may seem overwhelming, trusts are still critical and valuable financial management tools in many circumstances. An experienced trusts attorney can help you determine whether a trust is right for you. At Wilson Ratledge, we can advise you on the best course of action taking into account the legal and tax implications of a trust created for your unique situation.

With tax day 2019 coming up, the last thing you want to think about is an IRS notice telling you there’s a problem with your filing. Usually, when you get one of these notices, it’s because the numbers in your return don’t match what the IRS has calculated on their end, and that will occasionally result in an audit.

While tax avoidance within the guidelines is legal and acceptable, premeditated tax evasion is illegal when the Internal Revenue Service can provide sufficient evidence to press a case strongly. And when they do, they are serious. Very serious.

This leaves the audited delinquent taxpayer in a very precarious situation, to say the least, and the only recourse is to either pay up in full or retain an experienced tax attorney who understands how a tax lien can impact their estate. Here are a few steps that anyone being audited should consider.

Negotiating a Reduction During the Audit

The first step in stopping a potential tax lien is discussing the issue with the Internal Revenue Service agent during the audit. However, this should only be done with experienced legal counsel who can help mediate the discussion and evaluate the government claims based on existing tax laws. There is no code in the federal law statutes quite as extensive as the tax code, and the IRS has wide latitude when selecting a rule to apply.

Sometimes, those rules are technical and do not account for common mistakes, but sometimes minor differences could be negotiated away when the agent sees an opportunity to actually collect a significant portion of the delinquent amount in short order and settle the account quickly. This happens more often than taxpayers realize when they are honest about their return.

Bargain for an Installment Agreement

Installment agreements are a common method of settling a tax liability. An installment agreement allows the tax bill to be paid over an agreed-upon amount of time, which can work well for tax levies of under $25,000, because tax liens are not typically filed below the $25,000 threshold. However, taxes beyond the threshold can result in certain property being placed in lien and cause other issues with your estate.

Submit an Offer in Compromise

An offer in compromise, also known as an OIC, is a common method that many couples use when their tax debt is of any amount, but the delinquent taxpayer must prove they are qualified for this agreement. It is important to note that nearly two-thirds of all OIC submissions are denied. But, it can be a good faith step in getting a classification from the IRS that a debt is collectible but does not rise to the level of a lien motion.

They could also determine the tax debt is not collectible. The primary difference in these two rulings is that payments can be made toward the debt, which can help when there may be extenuating tax problems in following years, or that nothing is required to be paid. However, outstanding tax obligations are always filed against a couple’s credit report and stay in place until the debt is satisfied.

Paying in Full

The best method of settling an IRS tax debt to avoid a lien is paying the debt in full in any way possible, including applying for a loan that could make the matter one of a personal budget. While this may not work for all people, this is actually what the Internal Revenue Service prefers. This will also stop any damage the tax debt may have regarding personal credit ratings as well as ending a tax lien possibility.

One thing is for certain when dealing with the Internal Revenue Service – not paying taxes can assuredly result in final outcomes that no one wants to face. It is always important to address the problem as a serious life event, including how long it may take to emerge from the debt in good financial condition. Having an experienced estate planning and tax attorney who has dealt with estate planning issues and tax liens before can be the difference in an acceptable outcome or a lingering financial problem.

When you consider your family’s financial planning needs, you may be surprised to learn that a trust may be the best option. A trust is a versatile family planning instrument. It can give you flexibility and control over your family finances. It can help you protect assets and ensure that assets are managed responsibly.

What are some scenarios where a trust is beneficial?

Here are seven scenarios where a trust may be appropriate:

Example 1: Senior who wants protection and simple asset transfers

Louise is 80 years old. She has $200,000 in assets that she wishes to leave to her children. Social security provides the rest of her income. Louise needs funds to live in an assisted living center.

A trust may be appropriate for Louise for several reasons. Having a trust can shield Louise’s assets from personal legal liability. If Louise were to be at fault in a car accident, the funds in the trust may be off-limits from individuals who may want to make a claim against her assets.

The trust also provides for asset management and private distribution of the estate to her heirs upon her passing. Louise can place her assets in trust for her benefit with the remainder paid to her heirs. The trust can pay for her assisted living needs as well as pay for the other day-to-day expenses necessary to meet her needs. Having a trust provides the easiest asset management for Louise, the most financial security and the easiest transfer of the funds to her heirs in the future.

Example 2: Child with physical or mental impairments

Caden was born with significant physical impairments. He is going to need assistance for his care throughout his life. Over the years, Caden’s parents have saved $50,000 to help Caden with his living expenses.

Although Caden may qualify for disability payments from his state, if he has $50,000 in assets in his own name, he loses his eligibility. Caden’s parents may create a trust for the $50,000. The trust can pay for Caden’s expenses above and beyond what he receives in disability payments. Having a special needs trust ensures that Caden can access all available resources in order to meet his needs.

Example 3: Planning for children for an unknown future

Jack and Cheryl are the proud parents of three children ages 12, 8, and 3. Jack and Cheryl are preparing their estate planning package including their savings of $25,000. If Jack and Cheryl were to both pass away unexpectedly, their children are too young to manage the savings.

Creating a testamentary trust as part of the estate planning package can help these parents know that their savings are going to be managed properly in the future for the benefit of their children. The children are the beneficiary of the trust, and the managers of the trust must operate with the directive that they must use the trust assets for the children’s benefit.

The parents can specify whether the funds are for education, for daily living expenses or for another purpose. In this case, the trust can go into place in the event that the parents pass away while the children are minors.

Example 4: Leaving assets to charity

Jamie is 75 years old. Jamie is retired and has no children. He has $300,000 that he wants to leave to charity at his death, but he needs monthly income now. Jamie can use a charitable trust in order to receive a steady income stream from the funds now while committing to donate the funds to the charity upon his death.

To create a charitable trust, Jamie can place the assets in a trust. The trust can pay him income directly throughout his life. When Jamie passes away, the funds can go immediately to the charity. Using a trust, Jamie can meet his goals of preserving his income as well as leaving funds to the charity of his choice.

Example 5: Adult child who needs guidance

Charlie is 25 years old. He has a history of substance abuse. Although he graduated from high school, he has difficulty holding down a job. Charlie lacks direction. His parents have resources, but they fear that Charlie can’t manage a windfall of money.

Placing funds in a trust for Charlie can protect Charlie’s assets for the long-term. Charlie’s parents can structure the trust to provide for substance-abuse treatment. They can also set standards for trust distribution so that the assets last throughout Charlie’s life.

Rather than risking mismanagement and quickly depleting the assets, Charlie’s parents can have the peace of mind to know that the funds are going to be available for their child now and in the future.

Example 6: Maintaining privacy for asset distribution

The Rodriguez family is known in town for being a wealthy family. They own several businesses in town, and they make charitable contributions regularly. Because of their known financial success, community groups often ask for donations. The family often doesn’t know how to respond to the requests. They have limited time to respond to requests, and they want to ensure that they donate to organizations that they believe have the most impact in the community.

A trust can be the answer for the Rodriguez family. By placing assets in a trust for charitable purposes, they can tell people that their trustees handle donation requests. Family representatives can structure the trust in order to maintain as much control or as little control as they want as they decide where to donate the funds. With a trust, the family can keep their financial matters private as well as respond with an acceptable answer when others ask for contributions.

Example 7: Unique family situations

Katia married and had two children. Her husband died. Eventually, Katia remarried and had another child. Her third child is 12 years younger than her other two children. Katia wants to make sure that her spouse and minor child are protected. She also wants to ensure that her older children eventually receive a share of her savings in the event of her passing.

A trust may be the right answer for Katia. She can create a trust that provides income to her spouse for life as well as provides for her youngest child while the child is a minor. However, with a trust, she can ensure that her older children eventually receive a share of her assets. A trust can help Katia manage the complexity of her family situation to ensure that all family members have their needs met in the future.

Do I need a trust?

If you have assets that you want to manage for others, a trust may be right for you. Even if you’re the primary beneficiary of the trust, you may still benefit from the legal protections, privacy and convenience that may accompany a trust.

To know if a trust is right for you, consult one of Wilson Ratledge’s experienced estate planning attorneys. We can help you examine your entire situation in order to determine whether you and your loved ones can benefit from a trust. An estate plan can address all of your family needs and goals.