Trust, Asset Protection, Will, Revocable Trust, Irrevocable Trust

Luck of the Irish – the saga of the Murphy family cottage - (based on a true story)

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In 1969, Patrick and Ann Murphy became the proud owners of a lovely cottage on the easterly shore of Pleasant Pond in Bethel, Maine. They spent summers enjoying the peace of being surrounded by nature and dreamed of future generations making memories during their summer vacations and holidays.


Eleven years later, Patrick and Ann followed through on their vision and gave the Murphy cottage in equal 1/7 shares to their seven children with gift deed. That is when the trouble began.

The Murphy family is now celebrating 50 wonderful years of family gatherings and adventures and their great-grandchildren are truly blessed by their legacy. Though, as the current owners make plans to pass their shares to the next generation, they are taking responsible Estate Planning steps and would like other families to learn from their valuable experience.

For starters, had Patrick and Ann had consulted an attorney in 1969, they may have decided to transfer the property through a trust, instead of with a simple gift deed, which would have allowed their children to benefit from a step-up in basis.

Next, as these seven children made their marks on the world, many of them followed opportunities that led them away from home. Their children ended up living in states outside of Maine including New Hampshire, Massachusetts, Maryland and Arizona. This geography led to challenges since there was no formal management agreement in place. The owners relatively close-by in Massachusetts and New Hampshire were able to enjoy the cottage more, but were also disproportionately responsible for the labor-intensive responsibilities of maintaining a seasonal cottage.  The more distant owners in Maryland and Arizona questioned why they need to make equal financial contributions to upkeep and maintenance since they weren’t able to spend as much time enjoying the cottage. 

Then, in the mid-1990’s one of the siblings passed away suddenly and had not done any estate planning. Along with mourning the tragic loss of their brother emotionally, the extended family had to deal with complex, time-consuming, expensive intestacy proceedings in two states.

To complicate matters further, when four of the children decided to sell off their 1/7 shares, one of the children’s spouses volunteered as an attorney to handle the legal paperwork as a cost-savings favor to the siblings. Unfortunately, down the road minor issues such as missing spousal consent waivers required in Maine jurisdiction had major ramifications, so the family would have been better off doing everything by the book instead accepting the good faith effort of a family member.

When Molly, one of the two remaining owners with a 75% share, arrived at our firm to do her Estate Planning, she wanted to make sure the Murphy cottage would be saved as an important part of her legacy and passed on smoothly to her children and grandchildren. Our firm facilitated conversations with Molly and her brother Matthew, the other 25% owner, to bring their wishes to fruition.

Our firm coordinated with local Maine counsel and family members to run a full title search, execute corrective deeds, and transfer the property into the Murphy Cottage LLC with a clear governance structure.

The Murphy Cottage LLC established terms including:

  • Schedule for contributions to the annual budget and a replenishment of the capital fund based on ownership share;
  • Decision making guidelines for improvement projects;
  • Cottage use rules of conduct to make sure everyone shows respect for the property and its natural setting;
  • Fair labor compensation rates for members that have the time, skills and geographic ability to contribute to tasks such as opening and closing, moving docks and boats, and doing major projects such as building a deck, fixing the structural issues and repairing the rotted screen porch;
  • Allocation and reservation process for prime weeks and procedure for owners offering their weeks to other family members for an agreed reimbursement fee;
  • Succession plan for current owners to designate their direct descendant children as the family branch’s new owner in their individual Trusts;
  • Buy-out clause for any owners that are delinquent and are not able to stay in good standing;
  • Process for selling shares and option for sale of the entire property in the event that 2/3 owners are in agreement.

Thanks to Molly and Matthew’s efforts, future Murphy generations will be swimming in the pristine fresh water, playing with tadpoles and frogs, fishing for trout off the edge of the canoe, reading books on an Adirondack chair, hiking to the top of Mt. Baker for breathtaking views and drifting off to sleep to the eerie, beautiful calls of the loons. 

If you have a summer home that you want to preserve as your legacy, contact us today.

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March 15, 2019

Tax Saving, Trust, Tax Savings, Asset Protection, Will, Revocable Trust, Irrevocable Trust

The Advantages and disadvantages of a Will, a Revocable Trust, and an Irrevocable Trust

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There are a host of complicated terms associated with the legal practice of estate planning, but the Donohue, O’Connell & Riley team prides itself on making the process as simple for our clients as we can. Download our free comparison chart to learn if a Will, Revocable Trust or an Irrevocable Trust is best for you here.

 

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February 26, 2019

Whitepapers, Trust, Asset Protection, Will, checklist, New Year's Resolution

Prepare for the Road Ahead

The start of a New Year is a great time to plan ahead to save yourself and your loved ones time, money and stress. This easy-to-use checklist serves as a comprehensive guide for seniors, their families and caregivers as they consider all the legal, financial, personal and practical steps to proper advanced planning. We invite you to download and share this worksheet with anyone looking for an opportunity to live life to the fullest in the retirement years and prepare for the road ahead. 

 

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January 29, 2019

Whitepapers, Trust, Asset Protection, Will, checklist, New Year's Resolution

Resolve to Organize Your Affairs in 2019!

HAPPY NEW YEAR!

As you set goals and resolutions for 2019, organizing your affairs for peace of mind should be at the top of the priority list. Many clients and their families feel overwhelmed when they try to navigate the financial and emotional complexities of aging. We hope this Document Checklist gives you a solid foundation of helpful documents you’ll need to get your affairs in order, in the event of an unexpected health crisis. Please feel free to download and share with your family, friends and trusted advisors.

DOWNLOAD OUR DOCUMENT CHECKLIST

 

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January 3, 2019