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No.There are three different issues here:Who is responsible for paying off the mortgageWhat sort of insurance is it?Who gets the insurance?Who is responsible for paying off the mortgage? Actually, no one might have to pay it off. Suppose the house is owned jointly (joint tenancy). Both names are on the mortgage and deed. In that case, ownership transfers to the survivor, as does the responsibility to keep making the payments on the property.If just one person owned the house, then it gets more complicated. The house itself might go to one person (based on a will or, failing that, state law), but the debts of the individual may be the responsibility of the estate of the owner. Or the executor of the estate may have to pay the debt from the assets of the estate.What sort of insurance is it? If it’s some sort of life insurance, then the proceeds will go to the beneficiary named by the person who died. If it’s some other insurance—mortgage insurance, for instance, no. That’s not the purpose of that insurance (it’s to protect the lender in the event of default), and would be of no help to the survivors. Sometimes term life insurance is sold by “cute” names—for instance, to sound like it’s designed to pay off existing mortgages. Actually, it’s just term life insurance, usually with a very high mark-up. Still, that should pay upon death with the money going to pay off the mortgage.Who gets the insurance? We’ve covered this above. It’ll go to whoever the decedent specified . . . but that may not be the person who ends up with the house. Suppose, for example, the decedent was married. Probably the widow will get the house. But the decedent may have had an insurance policy naming his brothers or sisters the beneficiaries. Or, if he’d been married before, he might have left money to the children of his first marriage.It can get very complicated. But, basically, you’d need the right type of insurance and the right beneficiary for any insurance proceeds to pay off the house.See a lawyer for more information.

Yes, It is totally fine and rather common for the grantor to be the trustee of an irrevocable trust.Many lawyers shudder at the idea of allowing the grantor of an irrevocable trust to be the trustee. But the primary reason for this fear is long-rooted in traditional estate tax planning principles. Particularly, § 674 of the Internal Revenue Code provides that any trust wherein the grantor retains the power to control the beneficial enjoyment of the income or principal of the trust will make all of the income on that trust taxable to the grantor, and Internal Revenue Code § 2036 provides that any trust where the grantor retains the right to possess or enjoy the property or designate who will possess and enjoy the trust property will make the principal of the trust includable in the grantor's estate at death for estate tax purposes. Prior to 2001, irrevocable trusts were predominantly utilized for estate tax protection. Triggering code Section 2036 would violate estate tax planning goals.Bigstock-Debate--Two-People-Speaking-D-14929292 (1)However, after the Tax Act of 2001, wherein the estate tax exemptions were increased to in excess of $5,000,000, the traditional tax planning rationale was no longer valid. Currently, the estate tax rule is triggered only on individuals who have assets greater than $5,430,000, and on married couples who have twice that amount. Recent statistics indicate that only two in 1,000 Americans have assets that exceed the federal estate tax exemption limits, which represents .2 percent, leaving 99.8 percent of Americans without an estate tax concern. The key question is, why do lawyers continue to hold 99.8 percent of clients prisoner to the rules meant for the .2 percent?The Restatement Second of Trusts § 99 – and the cases cited thereunder, particularly Markham v. Faye, 74 F.3d 1347 – clearly states that creditors can only access the assets of a trust to which the grantor has retained rights. The question as to what rights the grantor has to access income or principal is a designing issue related to the beneficiary designations in the trust, not the trustees. The Baldwin case goes on to clarify that a grantor, as trustee, has the same fiduciary duties to the beneficiaries as any other trustee. Restatement Second of Trusts § 266 and the cases thereunder further clarify that it is well-established law that assets of a trust are not subject to personal claims against the trustee, even if the liability arises out of his trustee capacity. Further, Restatement Second of Trusts § 170 provides that a trustee is prohibited from self-dealing or acting in his or her own best interests. Nothing in the law is better settled than the provision that a trustee may not advantage himself or herself in dealings with the trust estate. Gibson v. Sec. Trust Co., 107 F.Supp. 766. A grantor's creditors are only entitled to income or assets available to the grantor, as is well-established under Uniform Trust Code § 505, and as further clarified under the Restatement Second of Trusts § 156. So in order to properly provide asset protection, the trust by its terms must prohibit distribution of the principal and/or income to the grantor, and no discretion shall be permitted to the trustee or anyone else to distribute it to the grantor. This will ensure asset protection.The key question then becomes what the grantor is seeking protection for. If one wants to protect income and principal, then no benefits should be retained, but the right to be trustee is still permitted. The only adverse consequence is that all of the income is taxed on the personal income tax returns of the grantor, and they are responsible for the income tax on the trust income. Further, all of the trust principal is included in the estate of the grantor at death, but for the 99.8 percent of Americans who are not subject to estate tax, this is not an adverse result; in fact it's usually a preferred result. If there is any question as to whether the grantor has the ability to pay the income taxes, then the trust can contain a provision that allows the trustee to pay any income tax due to the taxing jurisdiction exclusively (not the grantor) by reason of the inclusion of the income from the trust on the personal tax return of the grantor. This restricts distributions to the grantor, and only allows the trustee to distribute to the taxing jurisdiction, and only as to the income tax caused by the inclusion of the trust income on the tax return of the grantor.The key benefit of letting the grantor be trustee, and the one most important to clients, is maintaining control. Most people who have worked their whole lives accumulating assets are not ready to just turn them over to the kids or other third parties. Doing so not only puts the assets outside of the control of the grantor, but it also creates a risk of losing the assets to the creditors, predators, and lawsuits of the individual to whom they are transferred. Nothing could have a more adverse impact or be a greater risk to a client than that. Whereas the ability to control the assets, and to continue to manage the investments of the assets and keep them in the form they are currently in or change them as they desire along the way, is one of the greatest benefits to grantors when serving as trustee of their irrevocable asset protection trust.So being a trustee and grantor of your trust does not subject it to risk. There is no legal authority anywhere that indicates being a trustee of your own trust makes it subject to your creditors. There is an entire line of cases where courts have invaded trusts where the grantor is the trustee, but in every case it is due to the grantor's “fraudulent conveyance and management” of the assets where the trust was invaded, not because the grantor was trustee. So, be informed and be conscious of your clients' needs, and share with them the many advantages of having them stay in control of their assets.References :Abusive Trust Tax Evasion Schemes - Questions and Answerscan-grantor-trustee-his-irrevocable-trust-david-zumpanops: usual disclaimers about this not being certified advice :)

What measures can be put in place to prevent legal guardians of the elderly from stealing from them?There are safeguards that seniors can, and often should, put in place.Financial AbuseThere are a number of actions that every senior should take long before they have any problems with their health and/or their ability to handle their finances. These steps should actually be taken by every adult because an illness or injury that threatens a person’s ability to handle their finances, or make healthcare decisions for themselves, on a temporary or permanent basis, can occur at any time.A Durable Power of Attorney (Durable POA) gives someone else control over your assets in the event you become incapacitated.Although the article the question linked to revealed disgusting abuses that were aided by, at worse case—a corrupt court, and at best case—an incompetent court, none of the abused families mentioned having a Durable Power of Attorney. If they had a Durable POA at the time their parent was determined to be incompetent, the court would have a very difficult time putting aside the wishes the person expressed while still competent once they were declared incompetent.You want to be sure:Your Durable POA is adequate to be legally recognized in your state.The person you give power to:Is of good characterIs not unduly influenced by someone of poor characterDoes not suffer from addictions that could interfere with their ability to serve as your attorney-in-fact. An attorney-in-fact is what a person does when the Durable POA comes into effect. and it gives them the right to make decisions about your finances.That the person has enough knowledge and experience to make prudent decisions regarding your assets.For example, if you manage your own investments in the stock market, the person should have enough knowledge to prudently handle the investments or know enough to take them to a reputable broker dealer if they do not have the time or knowledge to manage investments.For example, that the person understands liability and risk as it relates to insurance and management of your property.Has time to manage your affairsA child who is managing children and a career may not be able to manage everything. Ask them if they are willing.A child who has their own business may not have time. Ask them if they are willing.If you do not have a logical choice that has the knowledge and time to manage your affairs and you have significant assets, you should strongly consider a bank trust company. You can put your assets into a Living Trust (discussed more later) and when you become incompetent to handle your own affairs, a Trustee at the bank will assume responsibilities. I do not suggest using a non-bank trustee. Banks are highly regulated and if a Trustee makes mistakes or violates the fiduciary responsibility to manage your assets in your best interests, the bank will make you whole.DefinitionsLiving TrustA living trust (sometimes called an "inter vivos" or "revocable" trust) is a written legal document through which your assets are placed into a trust for your benefit during your lifetime and then transferred to designated beneficiaries at your death by your chosen representative, called a "successor trustee."[1]As long as you are competent to handle your affairs, the assets in the Living Trust are managed by you. The only differences are:You have to sign your name differently.For example, Jane Doe, Trustee, of the Jane Doe Living Trust dated 9/9/17.Sometimes you have a little more hassle with a mortgage company or with the DMV because they want a copy of the Living Trust when you buy a home or register a vehicle as being owned by the Living Trust.The assets in the Living Trust remain yours to do with as you wish throughout your life unless a court determines that you are incompetent to handle your affairs at some point.At death, assets in the Living Trust bypass probate and transfer to your beneficiary(ies). This avoids probate and it also avoids public disclosure of your assets which takes place when a Will is probated. It also eliminates fees associated with probate.Fiduciary ResponsibilityA fiduciary duty is the highest standard of care. The person who has a fiduciary duty is called the fiduciary, and the person to whom he owes the duty, is typically referred to as the principal or the beneficiary. If an individual breaches the fiduciary duties, he or she would need to account for the ill-gotten profit.[2]While both bank trust department trustees and private trustees own a fiduciary standard of care, bank trustees are regulated and audited more and they have the assets to repair damages. Think of the Bernie Madoff scandal. If he had been the employee of a large financial services institution, they would have made restitution for the funds he absconded with but since it was his own firm and the funds were gone, restitution could not be made.An attorney-in-fact also has a fiduciary duty of care, however, they may not have the personal assets necessary to make you whole.Make you wholeMaking someone whole means restoring what was lost, such as mismanaged assets. If someone is made whole they are restored to a position as if no loss occurred.IncompetentIncompetent as it is used here refers to a lack of capacity to act in one’s own behalf due to mental or physical impairments. It has no bearing on the education or knowledge the person has when they are not impaired by a medical condition. It is a legal term that means they cannot make their own decisions (legally).The capacity to contract is a standard requirement for a legal contract. If the parties to the contract do not have the legal capacity to enter into the contract, the contract is voidable. This is why a minor (under legal age, usually 18) cannot contract for goods and services in most circumstances and is able to avoid or disaffirm the contract when they reach the age of majority. When an adult becomes incapacitated (incompetent) due to a medical condition, the capacity to enter into a legally binding contract no longer exists. This is why someone else has to act in their place.The successor trustees of a Living Trust should meet the same requirements noted above for an attorney-in-fact under a Durable POA.A Living Trust is a quick way to ensure continuity of care of your financial assets, both in cases of incompetence and at death. If someone owns real estate, even if they do not have a lot of assets, their estate must generally go through probate unless the real estate is in a Living Trust.It is a good estate planning tool and you should discuss the option with your attorney.Guardianship, Care of the Person, Health Care Power of AttorneyThe care of your physical person can be given to the same person(s) given responsibility for your assets or to someone else.A retired Nevada attorney had this to say:Let me be very precise in our findings: Having a private guardian appointed for a senior is like selecting a child molester to run a day care center. It is financial elder exploitation; sanctioned and approved by the Court and Nevada.[3]Given the histories outlined in the article cited with the question, his description is accurate.This form explains the Durable POA for Healthcare. A Durable POA for Healthcare gives the individual the ability to make medical decisions for you. It also gives them the right to access your medical information such as know which medications you are prescribed, who your doctors are, any diagnoses that have been made and prognoses. They are also allowed to make end of life decisions for you according to your wishes.End of life decisions could include a Do Not Resuscitate Order (DNR). A DNR could mean that you will be denied life-saving treatments including attempts to resuscitate you if your heart stops, insertion of breathing or feeding tubes, etc. It can also allow removal of life support.It is very important that you name someone who:Understands your wishes, andWill follow your wishes, andSomeone who doesn’t have a vested interest in your demise that they would prioritize over your wishes.If you have given someone a Healthcare POA it should be considered by the courts during any competency hearing. This should give you some protection against having a guardian that is unknown to the family appointed.General ProtectionsHaving a court appointed guardian take over your life strips you of your rights. It should not be done lightly and it should not be done without a high level of due diligence.A Federal Law should be passed that provides for:Mandatory notice to the individual and the family if someone petitions the court for a competency hearing that will lead to guardianship by someone who was not named by the individual while competent.Guardians are required to be held to a fiduciary standard of care.The state is required to audit guardians and if the state fails to perform this duty, they are required to reimburse clients who lose money due to fraud perpetuated by state appointed guardians.Guardians (state appointed selections) are required to pass comprehensive tests involving management of assets (similar to what is required of an Investment Adviser), and other knowledge levels as required to manage assets. There will be a regulating body that licenses them and tracks complaints, much like the FINRA CRD system.Whenever possible, management of assets and personal decisions such as care location, should be split between two parties. This will help avoid situations where the person managing the assets colludes with a nursing home to keep the senior so medicated they cannot resist the abuses or voice their preference to be with a family member.Preference goes to wishes of the person prior to their incapacity. Phone records, prior POA, social media, etc. can be used to demonstrate a strong and loving relationship that will be given priority over a stranger as guardian.This should include adequate time to seek counsel and for relations who live elsewhere to travel to the court.If temporary care is needed to ensure the safety of an individual, it should be provided without making any permanent decisions.A mandatory second option if someone is judged to be incompetent.Mandatory testing by an independent party (i.e. psychological and ability to think and make decisions) if the person is not completely incapacitated.A full evaluation of the medicine the individual is taking and possible drug interactions that may be causing confusion.If a guardian has had any influence over the drugs being taken, an evaluation of medications via extracting blood for testing by an independent lab.A method for individuals declared incompetent and their families to challenge the decisions of a court appointed guardian including re-review.Court appointed guardians should be required to allow family and significant relationships to continue contact and access to medical information they were granted prior to the hearing even if a court appointed guardian has been named.For example, if a daughter was given access to medical information during a prior hospitalization, the court appointed guardian must respect the individual’s wishes and continue providing access to such information after the person is declared incompetent.Severe penalties, including fines and jail time, for individuals who collude with others or otherwise act as public trustees (guardians, healthcare providers) and run roughshod over the rights of an incapacitated person.An independent state agency should be established to evaluate the assets of an individual placed into guardianship and make determinations that include, but are not limited to:A complete inventory of the assets performed with fiduciary level responsibility.A plan for care that considers the available assets.In some cases, it would be more cost effective to leave a person in their home and hire care to come to their home. This option should be taken when feasible.Do not put them in a facility that will deplete their assets quickly or that requires disposition of all their assets at fire sale prices. If there are sufficient assets to provide for care, assets that exceed anticipated needs, and especially mementos that are meaningful to others or to the person judged incompetent, should be retained and given into the care of family members. For example, in The New Yorker article, paintings done by their deceased son were thrown out even though the couple who was judged incompetent was asking for them, they were refused something meaningful to them.If a family member is willing to provide care, they should be given first priority unless there is an indication that they will not provide adequate care. Use Social Workers in much the same way children are given home visits to evaluate the care given if there are doubts.The same state agency should be required to investigate complaints.There should be approved charges (rates) guardians can charge based on a variety of factors including time and qualifications of the guardian. Exorbitant fees should disqualify the individual from serving as a guardian and incur fines and potentially, criminal charges for theft or elder abuse.An elder abuse hotline should be set-up, staffed (possibly by volunteers), and posted in physician, nursing homes, senior centers, and on the internet.Forbid states from requiring that seniors remain within their borders when a competent family member wants to relocate the senior to another state.They may want to have a process to follow-up on care if there are concerns using communication between state agencies in the old and new state. Given the mobility of families in this day and age, within state restrictions are ridiculous.Finally, senior education seminars that teach seniors how to protect themselves should be taught in senior centers around the country. Additionally, high schools should include a class on legal considerations adults should consider including the matters noted above, guardianship of any children they may have in the future, and Wills. Developing the habit of planning and managing the risk early in life will prevent problems throughout life.Many states have laws against elder abuse. If a guardian is suspected of elder abuse, they should be reported and investigated.The police should be trained to treat elder abuse the same way they do other crimes involving theft, and when it is involved, physical abuse. Psychological abuse, such as forcibly removing someone from their home with no notice following an incompetence hearing they weren’t informed was going to occur, should be considered criminal misconduct.Undue Influence is another form of elder abuse that often occurs when a senior is lonely and a neighbor, caregiver, or even a telemarketer takes advantage of them. Family members can also exert undue influence. Financial institutions, attorneys, and healthcare providers should be alert to comments that may indicate someone is attempting to exert undue influence.Elder abuse legislation should prohibit individuals who are in positions where they could exert undue influence from doing so. For example, a physical therapist who visits an elderly person in their home several days a week. Courts should have the power to easily overturn bequests to such persons when they are not discussed with the family.Elder abuse can include romantic relationships and even marriage to someone who takes advantage of an elderly person.The New Yorker article and descriptions of abuse in the article boiled my blood. When the guardian came to the couples home and informed them that they had both been judged incompetent to handle their affairs and were immediately being moved to a nursing home, giving them only 30 minutes to collect a few things, it infuriated me that anyone with so little compassion could be given that much power.My father is 83 and now that Mom has passed, he lives alone. If someone attempted to do this to him, this is how I imagine it would play out:Officer, this woman came into my home and threatened me. She wouldn’t leave. I thought she was kidnapping me so when she allowed me to go to the bedroom to get my medicine, I got my revolver. When I came back out I told her to leave. She began yelling at me and threatening me, so I shot her. I’ve been shooting all my life so of course she’s dead.I don’t think a jury in the world would convict a law abiding, 83-year-old veteran who shot an intruder. If a court has already determined that he is incompetent, he cannot be held accountable for his actions. If they attempt to overturn the ruling, it means the guardian was an intruder set on defrauding him of his assets.They wouldn’t target Dad because his assets are in a Living Trust so they can’t take control of them. The assets would go to the successor trustee and the guardian would soon lose interest, if she managed to herd Dad out the door to a nursing home.Make sure your parents feel empowered and protect themselves.Also make sure they are aware of what their healthcare providers in their medical records. If it appears they are losing their competency, take action to be appointed their guardian before an unscrupulous state appointed guardian can insert themselves into the process.UpdateNevada has tightened the rules to prevent elder abuse. Here is an update: Understanding the Guardianship Process in Las Vegas Nevada - Pintar Albiston LLPAdditional Information and Resources:Applying the Principles of Prevention: What do Prevention Practitioners Need to Know About What WorksTolls for Maintaining AutonomyWho Sues in a Case of Elder Abuse? | GDHClearinghouse on Abuse and Neglect of the Elderly (CANE)Find local agencies and services for older adults using the National Eldercare Locator (NEL) at 1-800-677-1116. NEL is a public service of the U.S. Administration on Aging.Elder Abuse Surveillance: Uniform Definitions and Recommended Core Data ElementsAdult Protective Statues in StatesState Elder Abuse LawsDisclosure This is not legal advice. Contact an attorney in your jurisdiction for competent legal advice. I am not an attorney.Footnotes[1] Top Three Benefits of a Living Trust[2] http:// https://www.law.cornell.edu/wex/fiduciary_duty[3] Guardianship - A Legal Sham & Disgrace