STORY AND PHOTO
BY STEPHEN VRATTOS
Thursday evening, February
28, residents gathered in
Towers on the Green for
a seminar designed to help them
navigate the sometimes confusing
waters of Trusts. Hosted by
the Political Action Committee
(PAC), the talk featured North
Shore Towers General Counsel
Errol Brett and special guest,
Trust expert Madelynn Mason.
Following opening remarks
from PAC Chair Felice Hannah
and Board President Dr. Stanley
Goldsmith, Brett took to the dais.
Brett began his tenure at NST more
than thirty years ago in 1984, when
the complex was converting from
rental to co-op. Three years later,
he was hired as General Counsel,
overseeing NST’s legal matters
ever since. According to Brett the
most important aspect of one’s
apartment is how the lease is titled
on the stock certificate and it’s an
aspect of which most residents are
strangely ignorant.
“The way you title a lease has
implications as to what happens
upon a sale or a debt or anything
that might happen,” he explained.
“We have people who are couples,
we have people who are single, we
have second marriages, we have all
kinds of permutations and combinations,
all of which have to be
considered when you’re titling your
apartment when you purchase.
And in case things have changed
since you purchased, you should
consider retitling it, if it is going to
adversely affect you.”
If owned by an individual, the
property can be disbursed in a Will
or a Trust upon the owner’s death.
With couples, however, there are a
variety of options with regard to an
apartment’s title. A husband and
wife may hold the apartment ownership
individually—each owning
a half—in what is called “Tenants
in Common,” whereby a spouse’s
passing does not result in their half
of the apartment automatically
becoming the sole possession of
the other, but rather designated to
the deceased spouse’s heirs. This
situation is more common in second
marriages.
PAC hosts informative discussion on viable
option to Wills
Contrarily “Tenants by the
Entirety” means each spouse owns
the whole, so when one dies, ownership
automatically goes to the
other without having to go through
probate, will or trust. One important
advantage to this designation
is if one half of the marriage gets
into financial trouble—perhaps a
judgment is brought against the
spouse by a creditor—the home
cannot be seized while the other
spouse is alive.
The third way an apartment can
be held is called, “Joint Tenants
with Right of Survivorship,” ownership
by persons outside a husband
and wife: brothers, sisters,
life partners, friends, etc., as when
an apartment is passed through a
Will. As the lawyer who oversees
the transfer of the properties at
NST, Brett gets particularly upset
at attorneys, who do not ask a prospective
shareholder how he/she
wants to hold title and he urged the
assembled to perform due diligence
in checking the status of the titles of
their own apartments. Apartments,
as with other assets, can be held
in a Trust. Hence, Brett’s setting
the stage for the second half of the
presentation addressed by fellow
attorney Madelynn Mason, who
specializes in the areas of Trusts,
Estates, Wills, Elder Law and
Special Needs.
“A Trust actually is a legal
entity. It’s like its own little corporation,”
Mason explained. Trusts
are created by somebody, called a
“Grantor” or “Settlor,” and overseen
by a “Trustee” or “Trustees,”
though Mason believes more
than two Trustees make a Trust
difficult to handle. The person
or persons who benefit from a
Trust are, appropriately enough,
referred to as “Beneficiaries.” There
are two major types of Trusts. In
Vivo or Living Trusts are created
during an individual’s lifetime. A
“Testamentary Trust” is created
under the terms of a Will and do
not get funded until after the Will is
probated, at which point the assets
therein can be used for the benefit
of an heir who may need guidance
or has special needs.
There are two types of Trusts:
Revocable and Irrevocable. Often
referred to as “Will Substitutes,”
Revocable Trusts can be changed
at any time during one’s life, while
the individual “has capacity.”
Ownership of selected assets can
be transferred into these Trusts,
such as property (your apartment),
brokerage accounts, checking and/
or savings accounts; assets can be
taken out or even sold. The terns
themselves can be changed, as
well.
The Trustee of a Revocable Trust
is usually the person who created
it, who is also most often the
beneficiary of the assets in the
Trust during their lifetime, even
if they become incapacitated.
In such a scenario, the Trust is
designed for another person to
step into the Trustee role, but
the assets therein continue to go
toward their benefit.
Conversely, Irrevocable Trusts
are inalterable and most often
come into play upon a person’s
passing. “Revocable Trusts become
Irrevocable upon your death,”
Mason explained. “At that point
the terms are set in stone.” There
are exceptions, but those limitations
depend on how the Trust was
originally crafted. Most likely, an
Irrevocable Trust’s Trustees are
not the individual who created it,
perhaps their children, a surviving
spouse or anyone the person
chooses.
A Revocable Trust does not give
an individual creditor protection
or protection from lawsuits. If a
person’s health takes a downturn
and they must be moved to a
nursing home or medical facility,
Revocable Trusts do not protect
the assets within the Trust. So why
do people use Revocable Trusts;
why not use a Will? The most significant
advantage: A Trust avoids
probate. Probate is the legal procedure,
which follows someone’s
death, during which their Will (if
that be the case), gets filed with the
court; a judge decides the veracity
of the Will and somebody is
given legal authority—appointed
“Executor”—over the dissemination
of the deceased’s assets.
Also, Will-holders with real
estate assets in various states
necessitate separate court proceedings
in each of those states to determine
the outcome of the property
holdings therein. Revocable Trusts
allow for transferal of deeds from
multiple states, each with assigned
designates upon the owner’s passing
without legal interference.
Revocable Trusts forego legal
notification of people, who may
have been named in a Will, regarding
contestability of the document.
And at its most basic, a Revocable
Trust neatly and conveniently packages
an individual’s assets in one
location to ensure oversight and
proper distribution.
Trust Me
Speaker Madelynn Mason addresses a question from the audience
12 NORTH SHORE TOWERS COURIER ¢ April 2019