Kimberly Leach Johnson, an es­tate planning attorney in Naples, Fla., recently received a call from a client who said he wanted to unwind a trust that held a house he'd put inside it for his children. Under the plan, the man had put his $750,000 home into an irrevocable trust, called a qualified personal residence trust, that expired after 15 years. The hope was that the house would appreciate and his children would receive that rise in value-tax free.

Indeed, the house is now worth $1.5 million, meaning he and his wife were able to get $750,000 out of their estate without their children having to pay estate taxes on it.

But the plan required that once the 15 years were up, the parents had to pay their children rent. And in the current economic climate, the man, now 78, feared he could not afford to do that. Moreover, he wanted to keep the house.

Johnson pleaded with him to keep the plan in place, saying nearly 15 years had gone by and the trust was set to expire this February or March. If he unwound it now, the house would fall back into his estate, rendering the plan pointless. Moreover, it would cost about $7,000 in legal fees to unwind it.

"I kept telling him, 'You're overreacting. It's a great estate planning technique,'" says Johnson, a partner with Quarles & Brady.

She finally convinced him, over the course of several conversations, though he still spent $3,000 in legal fees talking to her about it.

Another client wanted to unwind a trust he'd set up in 1990, into which he'd put an insurance policy. A popular estate planning technique, this allows the insurance to pay off taxes when the estate is passed on to the client's children. In this case, the client's insurance was with AIG Group, and the client feared the company would no longer be solvent when it was time to cash in. He asked Johnson to dissolve the trust, saying he would rather have cash than the insurance at this point. He was so fearful, in fact, that he told her to unwind his second trust as well, even though that one didn't have AIG insurance but instead used a policy with Lincoln National Life Insurance Co. "There were going to be adverse tax consequences that he was willing to suffer because he wanted the cash," Johnson says.

Like children trying to break into their piggy banks because their allowance money has dried up, clients have been calling up their advisors in recent months trying to break into their estate plans, fearing they won't have enough cash in the current economic climate. Whether they have lost their jobs or seen their asset values plummet, many now have less money than they had when the plans were created, and now they want part of the money back.

"People are taking a closer look at any irrevocable trust to see what they've set up, what are their rights to access it, and, if there isn't a direct route, did they retain any interest in it," says Michael Smith, an attorney with Larkin Hoffman Daly & Lindgren Ltd. in Minneapolis.

Smith says he receives about three or four calls a month from clients looking to see if they can tap into their trusts. It's not yet a big percentage of his client base, but the frequency of the calls has definitely increased.

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