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Too many err when providing for heirs
Attorney offers suggestions to protect estates from mistakes and bad trustees
By George Raine, Chronicle Staff Writer

Over the next 50 years, it's expected that $45 trillion will be transferred to heirs and charities via estates - the largest wealth transfer in history.

How much of it is siphoned by trustees or lost to estate taxes, administrative fees, lawyers' fees, appraiser fees, accountants' fees or poor investment acumen surely will be a record, as well.

Estate planning, in particular trusts and their administration by financial institutions, can be mind-numbingly complex. Talk of them turns on the unpleasant subject of death. But unless consumers remain vigilant - and technology is employed for checks and balances - assets will continue to be lost in an industry largely unchanged for centuries and ever ripe for litigation.

"It's not a trustworthy system," says Barbara Suzanne "Sue" Farley, who has practiced law in the Bay Area for more than 30 years, specializing in litigation surrounding trusts and estates.

Farley says that nebulous and wide-open terminology in these documents - such as provisions for "health, education and welfare" - can lead to distortion of intentions. As she puts it, these are words "you could drive a truck through."

Warring and dysfunctional families and, often, veils of secrecy around family wealth also may be responsible for the lack of progress toward making the trust system more efficient and effective, said Farley.

People need to "be more vigilant about how they set up their estate, how they structure the way their money goes to their children and the supervision of their family and to assume you must be ever vigilant in oversight of your trustee, because if you are not it is very likely that your money will be diminished or dissipated entirely," said Farley.

Farley describes steps consumers can take to "disaster-proofing" estate plans and offers suggestions for avoiding messy family money conflicts, as well as a host of tips for holding on to wealth.

For several years, Farley, of Piedmont, and software developer Ernest Freeman of Oakland have worked together on software and the architecture of an enterprise system that financial institutions could employ in administering trusts, as well as a template for consumers who could be precise about how assets are to be distributed. She has written a book for consumers on the topic, "Trust, Are You Kidding?" published by Morgan James Publishing in New York.




The Risk of Trusts

The New View of Trusts

The New View System

  • Step One-Enter Info
  • Step Two-Design the Trust
  • Step Three-Registration Service
  • Step Four-Implementation Map
  • Step Five-Legal Constraints
  • Step Six-Ongoing Execution

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  • Over the next 50 years $45 trillion will be transferred to heirs and charities via estates - the largest wealth transfer in history.

    How much will be siphoned by trustees...lost to estate taxes...lost to administrative fees or lawyers fees...other fees?

    How well will these trusts be managed?

    What kinds of investments should be made with the money under management?

    Trust, Are You Kidding

    CLICK HERE for more info on the book