In a Nutshell

May 2022 | News & Updates
In this edition of our newsletter, learn how to "Just Say No" to your bank's request to see your trust, discover why it's not enough to address guardianship of your minor children in your Will alone, brush up on your ABCs (of estate planning, that is) and subscribe to our RSS feed so you can stay up-to-date on new blog content!

When the Bank Asks for Your Trust, JUST SAY NO!

For the last few years, we have experienced historically low interest rates which have enticed a lot of people to refinance their mortgages. Refinancing to take advantage of low interest rates allows homeowners to reduce their monthly mortgage payment and provides an opportunity to consolidate higher-interest debts into a lower-interest mortgage. With a low-inventory housing market and next-level competition among buyers, some homeowners are opting for a cash-out refinance. By cashing out the equity in their home, homeowners can remain in their current residence and secure the funds for renovations and remodels at a favorable rate. These are all great strategies that can help families better manage their finances. Yet, it's not always smooth sailing. Sometimes during the process of refinancing, clients with revocable living trusts are derailed by a request from their lender to submit their trust for review prior to loan approval. The conversation usually goes something like this:

"We'd be happy to handle your loan refinance for you. Since the property is currently titled in the name of your trust, our underwriters will need a copy of your trust in order to process your application and approve your loan."

Wait, what?!?

Yes, it's true. We have lost count of the number of trust clients who have called or emailed to say the lender is holding their loan hostage until the client turns over a full copy of their living trust, despite the client telling the lender that they have been advised by their attorney not to turn over the document.

Why does the lender need to know who your heirs are, how their inheritance is structured, what family heirlooms you want to give to particular people, which charities you have included, how the Trustee is to be compensated, or the details of countless other provisions that may be in your trust? The answer is --- they don't! None of that has any bearing on your loan application. Yet, the bank will routinely ask for a copy of the full trust in order to proceed. So, let's be clear about this:

Under North Carolina law, the bank does not have the automatic
right to read and review your entire trust. Period. End of sentence.

To learn what information you should turn over to your lender as well as what type of legal relief is available to you in the event the lender refuses to retract its demand for the trust, check out the full article on our blog. Remember, you have the power here. If the lender will not back down, take your business elsewhere! And, as always, contact us with questions or concerns. We have your back!
Make sure you name a standby guardian for your minor children
should you become temporarily unable to take care of them.

Most people only think of naming a guardian for their minor children in their Last Will and Testament. Yet, your Will only comes into play upon your death. Your Will does not cover you being incapacitated, disabled, or otherwise unable to take care of your kids. That's why having a will is not enough. As a parent, your estate plan should also include a Designation of Standby Guardianship. This type of guardianship allows you to make advanced legal arrangements for a temporary or “standby” guardian if a particular triggering event happens.

The standby guardian does not have to be the same person you would name as the permanent legal guardian of your children upon your death. For example, if you are deceased, you may want a family member who lives in a different state to be the legal guardian for your kids. But, for a more temporary need, it may be more appropriate for the standby guardian to be someone who is local, someone who can easily get to your kids to pick them up from school in an emergency and maintain the status quo for your children (keep them in the same school, seeing the same doctors, maybe even sleeping in their same beds, etc.) until you no longer need the standby guardian's help.

In North Carolina, a Designation of Standby Guardianship is good for a maximum of 90 days. If it looks like a longer period of guardianship is needed, then the Standby Guardian would need to file a petition to be named the formal guardian of your children while you continue to recover.

Contact us at (919) 678-5761 or at [email protected] with questions about this important "Minor Matter." We can help you navigate this issue and assist you with making a plan for a standby guardian.
Agent
Beneficiary
Conservator
Decedent
Executor
Fiduciary
Guardian(ship)
Health Care POA
Intestate (Succession)

What comes next?
Follow us on Facebook or Instagram to uncover the remaining words in our ABCs of Estate Planning series.

Trust us,
you don't want to miss X, Y, and Z!
Stay up-to-date on our latest blog posts, which are designed to inform you about important changes in federal or state law that could affect your family and finances, reinforce key planning concepts, highlight resources that can help your loved ones navigate the administration process after your passing, and share practical tips (like the best place to store your estate plan). Simply copy and paste https://www.leavealegacync.com/blog-feed.xml into your RSS reader and be the first to know what's new with Privette Legacy Planning. Happy Reading!
‌

Privette Legacy Planning www.leavealegacync.com