United States: Living Trusts: The Pros and the Cons

Last Updated: September 11 2002
Article by Ralph M. Engel

Although the situation varies from state to state, for many clients of moderate to substantial wealth little is gained, and much may be lost, through the use of living trusts.

As Consumer Reports Magazine stated in its February, 1997 issue, "the growing popularity of living trusts is in direct proportion to the considerable efforts that lawyers, financial planners -- and more than a few fast-buck artists -- have been making to sell them...." Indeed, living trusts are actively promoted, even in direct-mail and newspaper advertising, and articles appear on a regular basis in the financial and consumer press expounding the virtues of living trusts, and equating probate with living hell.

On the other hand, in appropriate circumstances living trusts can save substantial time and expense.

The purpose of this article is to permit estate planning professionals, as part of the estate and financial planning that they do for their clients, to have a fuller understanding of living trusts so as to be able to more accurately advise their clients as to the pros and cons of living trusts, what they accomplish, what they donít, and whether a revocable living trust is appropriate for the client in question.

What is a living trust?

Whereas a Will only comes into effect when a person dies, and a trust created by a Will (called a "testamentary trust") does not come into effect until then either, as its name suggests a "living trust" usually starts to function while the person who created it is living.

Whereas there are various types of trusts which may be created by an individual while living, preferably as part of his or her overall estate plan, the term "living trust" (sometimes called a "loving trust") typically (and in this article) refers to a revocable living trust, being a trust that is created during life but which may be revoked by the person who created it (usually called the "grantor", "settler" or "trustor"), at will, so long as he or she is legally competent to do so.

The document which creates the trust (typically called a "trust agreement", a "deed of trust" or a "trust indenture") sets forth who the Trustee is to be (frequently the grantor, so long as the grantor is able to act, or a bank, trust company or trusted advisor) and how the trust is to be administered, usually both during the grantorís lifetime and thereafter.

Because the instrument creating the trust is revocable, the grantor effectively retains total control over the assets of the trust during his or her lifetime, so long as he or she is legally capable of acting.

What taxes do living trusts save?

None!

Whereas the literature, advertisements, etc. promoting living trusts regularly state that living trusts save income taxes, death taxes or both, in fact they save no taxes at all during the grantorís lifetime or even after his or her death, as compared to an equivalent estate plan contained in an appropriately drafted Will. On the other hand, an estate plan that could be incorporated into a Will can be included in a living trust instead, usually with substantially identical tax results.

All of the assets of a living trust are potentially subject to death taxes upon the grantorís death. They are usually entitled to the same deductions, exemptions and credits, such as the marital and charitable deductions, the applicable credit amount (unified credit or "exemption") and any credit (or deduction) for state death taxes, as would have been available had the assets of the living trust been owned by the grantor personally.

So long as the grantor is living, the living trust is a "grantor trust" for income tax purposes, so that all of its income, including capital gains, is taxed to the grantor as though the trust did not exist.

So long as the living trust is fully revocable, the funding of the trust does not incur gift taxes. If, however, the document provides that the grantor loses the right to revoke it upon the occurrence of a specified event during the grantorís lifetime, such as the grantorís incapacity, a gift tax may be incurred if and when that event occurs.

Living trusts may have adverse tax consequences. For example, if the terms of the living trust require the division of the assets of the trust, upon the grantorís death, into two or more portions, as is often the case, that division may be considered a "distribution", thereby possibly incurring capital gains taxes and, moreover, potentially eliminating the ability to utilize the six-months-after-death alternate valuation date for death tax purposes.

Under the 2001 changes in the federal tax law which might lead to the introduction of carryover basis in 2010, if the living trust is not fully revocable by the grantor at death, such as because someone elseís consent is required, its assets may not qualify for any basis step-up whatsoever.

Also, since an estate can pour into a trust, the use of a fiscal year for the estate for income tax purposes, and of the calendar year for the trust, can result in deferral of the payment of income taxes on estate income, a benefit available to a combination of an estate and a trust, whether the trust is a testamentary trust or a living trust, but not available if only a living trust is utilized.

Do living trusts provide protection from creditors, such as Medicaid?

The answer is no.

Since the trust is revocable by the grantor, the grantorís creditors can reach its assets during the grantorís lifetime, and the assets of the trust are also subject to the payment of the grantorís debts which are existent at his or her death.

In fact, some states permit a deceased personís creditors to go after the assets of his or her living trust at any time, but limit the time during which a creditor may file a claim against those same assets, if held in the personís own name and thus passing via his or her Will, to not more than a specified number of months (not years) after the publication of an appropriate notice to creditors. Thus, for clients who may have creditors with claims against them, it may be detrimental, rather than beneficial, to rely upon a living trust as opposed to a Will.

Under Medicaid rules, the assets held in a grantorís living trust are not protected, and usually must be used to pay the grantorís expenses to the same extent as if the grantor owned them outright.

With respect to Medicaid planning, transfers to qualify for Medicaid must typically be made at least 36 months in advance. Some experts in the field, however, believe that a transfer made from a living trust to qualify for Medicaid must be made at least 60 months in advance, or two years before the equivalent transfer would have had to have been made had there been no trust. Accordingly individuals who fear that they may one day need nursing home or equivalent care of the type Medicaid provides, and who have the desire to protect their assets against such expenses, should consider whether they will be better off, as far as obtaining Medicaid assistance is concerned, with a living trust or, rather, without one.

Of significance in some states, such as New York, one spouse may create a supplemental/special needs trust for the other spouse, if incapacitated, by Will, and thus protect the deceased spouseís assets from the nursing home costs of the surviving spouse and afford the surviving spouse access to Medicaid benefits in appropriate instances, but the same result cannot be achieved using a living trust.

Do living trusts avoid probate?

If a client has all of his or her assets in a living trust, or payable to or held jointly with one or more individuals who survive, there may well be no need to go through probate upon the clientís death.

If, however, the client has non-exempt assets of any substantial value (what "substantial" means depends upon the law of the state in which the client resides at death -- in New York it means in excess of $20,000) held in his or her own name at death, or without a designated beneficiary or joint owner who in fact survives, those assets typically will have to go through probate, despite the existence of a living trust. In fact, since many clients who create living trusts never fully fund them, and keep at least some of their assets in their own names, whether to have a feeling of security or for other reasons, it is quite common to have the living trust have little, if any, effect with respect to avoiding probate.

What is probate?

All probate actually is a court proceeding pursuant to which an appropriate judge (or "Surrogate") declares a Will to be valid, and appoints the individual or individuals (or bank or trust company) responsible for handling the administration of the deceased individualís estate as Executors or Personal Representatives thereof.

The probate process is based upon a series of forms completed and filed by the Estateís (usually the same as the deceased individualís) attorney. In some states, such as New Jersey, the clerks in the court actually fill out the forms. In fact, unless there are problems due to distributees (heirs) who are under a legal disability (e.g., minors or persons who are mentally disabled) or cannot be found, there is a Will contest, the Will itself cannot be found or any necessary witnesses cannot be located or are uncooperative, the actual probate process typically takes only a few weeks; sometimes the entire process can be completed in just a few days.

In some states, such as Florida and Connecticut, one must prepare documents to conclude the administration of the estate, if one goes through probate, which have to be signed by the estateís beneficiaries and filed in the court in which the deceased individualís Will was admitted to probate. In other states, such as New York, however, no such filing at the conclusion of the administration of an estate is typically required if all of the estateís beneficiaries and the Executors agree.

Furthermore, some states that have adopted the Uniform Probate Code, such as Illinois and Missouri, offer an informal probate process with little judicial supervision, called "Independent Administration", so that, unless unusual problems are encountered, relying upon a Will, and thus going through probate, incurs few, if any, delays and additional expenses as compared to using a living trust.

What are the legally mandated probate fees?

They vary by jurisdiction. In some states, such as Connecticut, they can be considerable. The fees can be even higher in California. In New York, however, the maximum court fee for filing for probate is $1,000. Thus the savings that result from avoiding probate in California may be vastly higher than the savings would be in certain other states, such as New York.

What about collecting assets, paying bills, filing tax returns, paying taxes, distributing assets, etc.? Are those not probate?

No, probate is only the initial court process described above. All of these other actions take place whether one goes through the probate process or not.

As pointed out above, living trusts, in and of themselves, do not produce any tax savings. If a clientís estate would have been required to file federal and/or state death tax returns, those returns must also be filed if the clientís assets are held in a living trust. Estates have to file fiduciary income tax returns, but, after the grantorís death, so do living trusts.

The Executor or Personal Representative of a deceased personís estate is responsible for making sure that the estateís assets are collected, the bills are paid, the tax returns are prepared and filed, the taxes are paid and the assets of the estate are appropriately distributed, but all of those duties fall upon the Trustee of the living trust if there is no Executor or Personal Representative.

Creating and fully funding a living trust during the grantorís lifetime avoids the work entailed in transferring assets from the name of a deceased individual into the name of his or her estate. This is because the grantor of the trust already completed the paper work necessary to make those transfers when the assets were transferred to the trust. From the administrative standpoint, however, little other work is avoided by the use of a living trust as compared to a Will.

Are there exceptions to the above rule?

Yes, in appropriate instances.

For example, a person who owns real estate or tangible personal property (furniture, furnishings, works of art, jewelry, automobiles, etc.) located in a state other than the state in which he or she resides would potentially have to have his or her Will admitted to probate not only in the state of his or her residence but also in each other state in which any such property is located (called "ancillary probate"). Transferring those out-of-state assets into a living trust during the clientís lifetime may save the cost of ancillary probate.

Those individuals who need very rapid administration of their assets upon death, such as persons invested in speculative securities or securities held on margin, and clients with closely-held businesses that they actively run, may not be able to weather the delays incurred in the probate process, even if they are only delays of a few days or a few weeks. Such persons can benefit from the creation of a living trust, but only if the assets which need immediate care are transferred, in time, to the trust.

Other clients who may gain from avoiding the probate process through the use of living trusts are individuals who live abroad, particularly in non-common-law jurisdictions (much of Europe and South and Central America, for example, as well as the Province of Quebec), or in other jurisdictions which either have no probate process or have the equivalent of probate handled by a notary rather than by a court. If such individuals also have assets which will be subject to administration in the United States, it may be highly beneficial for them to place their U.S. assets in a living trust during their lifetimes to avoid the incompatibility of the laws of the different jurisdictions.

What if one has heirs who are not legally competent or cannot be found?

Depending upon the law of the state in which they reside, persons in such a situation may encounter delays before probate can be achieved. This is because the incapacitated distributee (heir), if a legally necessary party to the probate proceeding (the rules vary from state-to-state, but are strict in such states as New York), must be appropriately represented, which mean that the judge may appoint a Guardian ad Litem, being an attorney whose job it is to represent the interests of the missing or legally incapacitated individual (every minor is considered legally incapacitated, although, if he has a court-appointed Guardian, a Guardian ad Litem may not be required). In such instances probate can take months, and a living trust may be worthy of consideration. Query, however, whether the work (and expense) involved in drafting and implementing a living trust is justified as to younger clients just because they have minor children?

Probate problems are often encountered as to clients whose distributes cannot be found, (e.g., refugees and single people who have no descendants and no other close relatives). In such instances probate delays can also be considerable, and it may be necessary to employ a geneologist to find a clientís closest relatives (or to prove that they are dead and have no descendants of their own who are still living). A fully funded living trust can avoid the resulting delays and expense.

What about naming a Guardian for oneís minor children?

It is not possible to effectively designate the Guardian of the person or property of oneís minor child via a living trust. Unless handled via a separate but legally acceptable document, that is to be done via oneís Will. Accordingly, people with young children who might want to utilize a living trust to avoid probate delays nevertheless use Wills in order to designate Guardians, thereby subjecting themselves to the same potential probate delays, and many of the same expenses, that they were trying to avoid by creating living trusts in the first place. Thus the living trust may prove beneficial with respect to administration of a clientís assets, but it cannot be used to permit a parent to select those who will raise his or her children, or handle any property that will be owned by his or her children, after the parentís death.

What about legal and accounting fees?

Legal fees vary from attorney to attorney and state to state. They are often based upon the value of the deceased clientís gross estate, being all of the assets being administered, in whatever name they are held. Accordingly such fees are typically charged with respect to assets in the deceased personís name, assets held jointly, assets payable to designated beneficiaries, and assets held in living trusts. That is because the attorney is effectively responsible for dealing with all of those assets.

On the other hand, legal fees may be reduced if the work involved is also reduced, a benefit a fully funded, properly drafted living trust may perform. If, however, the trust is not fully funded, so that it must be administered and, in addition, the clientís Will must be probated, legal fees may actually be increased, particularly if, as too often happens, the provisions of the Will and of the trust do not mesh.

Sometimes the estateís (or trustís) attorney will charge based upon time expended. In such cases the legal fees will depend principally upon the work involved. Dealing with only a Will, or solely with a fully funded living trust, will normally result in a lower legal fee than will be incurred if the attorney has to help administer the clientís living trust and also probate the clientís Will.

With respect to the work done by accountants, whether or not a living trust is involved, final personal income tax returns for the deceased client will typically be required. After the grantorís death, living trusts require the preparation and filing of annual fiduciary income tax returns, just as estates do. Accordingly, the work of the accountant may be little different with a Will than if there is only a living trust. If, however, both a Will and a living trust are involved, because some of the clientís assets pass via his or her Will, even to his or her living trust, after the clientís death the accountantís work as to fiduciary income taxes may double.

Since a revocable living trust is a "grantor trust" during the grantorís lifetime, it will not have to file income tax returns while the grantor is living.

What about the commissions of Executors/Personal Representatives?

Although there are exceptions to this rule, the commissions of an Executor or Personal Representative are typically charged only against the assets which "go through probate", being those that pass via the deceased individualís Will. Thus having assets pass other than under the Will, such as via a living trust, often avoids the payment of such commissions.

On the other hand, in many instances the Executors or Personal Representatives are family members. Even under the new death tax law, estate tax rates are still higher than income tax rates are. The commissions paid to the Executors or Personal Representatives may be estate tax deductible. Accordingly, it can actually save money to pay commissions to family members serving as Executors or Personal Representatives, even if they are also beneficiaries of the estate.

If a federal and, if applicable, state estate tax return will be required, it will often take two to three years before the administration of an estate, or of the living trust which replaced the probate estate, can be completed, because of the speed with which the IRS and state taxing authorities proceed. Furthermore, death tax returns are typically not even due until nine months after the deceased individualís death, and there may be appropriate reasons to extend the filing of those returns for up to another six months.

If a living trust run by an outside (non-family member) Trustee is utilized, the Trustee will usually be entitled to annual commissions for the time during which the administration of what is, in effect, the deceased individualís estate (although it is in the form of a living trust) proceeds. Thus he may be entitled to commissions for two to three years. If, as in New York, a paying or termination commission is also due in connection with the distribution of the assets of the trust, the Trustee is typically entitled to that too.

If one takes an estate of some size, it is likely that the commissions payable to the Executor or Personal Representative would be about three percent of the value of the property passing under the Will. A Trustee, on the other hand, would typically be entitled to a commission of between one-half of one percent and one and one-half percent of that principal. That commission, however, is payable annually, unlike the principal commission payable to the Executor or Personal Representative, which is typically payable only once. Thus a one percent annual commission paid for two to three years, plus a one percent paying commission, can easily add up to at least as much as what an Executor would have received for doing the equivalent work had there been no living trust.

Do living trusts really save money?

As noted above, they may save Executorsí commissions, and they may somewhat reduce legal and accounting fees, but the savings in those respects are often relatively small.

On the other hand, since one can never be certain that a client creating a living trust will put all of his or her appropriate assets in that trust during his or her lifetime, and keep them there until death, it is usually necessary for the attorney preparing the living trust to also prepare a Will, even if the only effect of the Will is to add whatever assets remain in the clientís name to the living trust upon the clientís demise. The result is that two documents are required, a Will and a living trust, frequently resulting in higher legal fees, payable when the documents are prepared, than would have been incurred by the client had there only been a Will. In fact, this may well be the reason why Consumer Reports wrote: "Not surprisingly, a living trust usually costs more to set up than a Will...."

Do living trusts avoid "Will contests"?

If there is no Will there can be no Will contest, but it is perfectly possible to contest a living trust in a manner very similar to the manner in which a Will would be contested.

It is for this reason that some states, such as Florida, require that most living trusts be witnessed in much the same manner as a Will would have been witnessed, had a Will, rather than a living trust, been utilized. Some other states have no formal witnessing requirements or only require a living trust to be notarized, not witnessed, but it is highly unlikely that the notary public will remember anything at all about what occurred when the document was executed.

A living trust is a contract, and the legal standards that apply to the ability to enter into a contract typically apply to trusts as they do to other contracts. A Will, however, requires only "testamentary capacity", which may be little more than the ability to know the natural objects of oneís bounty, to determine who is to receive what under the Will and to have a reasonably accurate picture of oneís assets. Both documents can be attacked based upon fraud, duress, lack of mental capacity, forgery, etc.

In many jurisdictions there is much less law as to the contesting of living trusts than there is as to the contesting of Wills. Accordingly an individual who wants to utilize a living trust to avoid a Will contest should examine applicable law to make sure that use of the living trust will in fact improve his or her chances of success.

It should be noted that, in "the land of the living trust" (Florida), it is possible to limit the period of time during which one can challenge a Will to three months from the publication of the Notice of Administration, which publication only occurs if there is a Will and, thus, probate, whereas the validity of a living trust may be challenged at any time during the term of the trust by any interested party (unless there has been an accounting proceeding to which the person wishing to challenge the trust has been made a party).

Do living trusts avoid problems in the event of incapacity?

They may, but there are problems there as well.

If, as is typical, the living trust names the grantor as the sole Trustee, and provides that, if the grantor dies or becomes incapacitated, someone else (or a bank or trust company) is to become the Trustee, it is usually easy enough to ascertain that the grantor died, and to prove that via a certified death certificate. What, however, happens if the grantor is merely incapacitated? How are banks, brokers, title companies, etc. to know that such is the case, so that they are willing to deal with the successor Trustee?

Unless an appropriate procedure is spelled out in the trust instrument itself, it may be necessary to go through a guardianship or incompetency proceeding in the applicable court in order to have the grantor/Trustee of the trust declared unable to serve, so that the successor Trustee can take over. This, however, is just what the client sought to avoid when he or she created the living trust in the first place.

One can write a standard of incapacity into the document, such as the inability to manage oneís financial affairs as confirmed by letters from two doctors, but query whether banks, brokers, etc. will honor it? How do they know that the letters are genuine, and correct? There is really no way to ascertain this in advance, and there is no law, in most jurisdictions, which sets a standard other than going through a court proceeding to determine incapacity.

On the other hand, instead of (or in addition to) a living trust, one can utilize a durable general power of attorney using, if feasible, the forms of the clientís banks, brokers, etc. in addition to standard or statutory forms. Such powers of attorney are typically honored without question. Furthermore, unless they are "springing" powers, which only spring to life upon the occurrence of a specified future event, they are effective at once, and do not require future incapacity to be proven.

An alternative is to create an unfunded living trust, of which the client is the grantor but not the Trustee, and to use a durable general power of attorney to transfer the clientís assets to it if the client someday in fact is incapacitated.

Obviously a power of attorney should only be given to someone whom one totally trusts, but one should not designate a person who is not trusted as successor Trustee of oneís living trust either.

Durable general powers of attorney, including those on forms provided by the clientís banks and brokers (and, perhaps, the IRSí and applicable state taxing authoritiesí forms as well) are, for most clients, the only incapacity planning documents they will need (other than living wills, health care proxies or directives and, perhaps, the designation of a guardian). All of this can be accomplished at less cost, and with less complexity, than would be incurred utilizing a living trust. Furthermore, the client can leave title to his or her assets in his or her own name, and is not obligated to transfer them to a trust.

Can a person place all of his or her assets in his or her living trust?

If a client has assets payable upon death to another, be they savings bonds, insurance policies, retirement plans, "in trust for" accounts, securities or whatever, and the person to whom they are payable does not survive the client, unless an alternate beneficiary who survives the client has been validly designated the assets in question typically pass to the clientís estate, and are thus governed by his Will. Rarely do they pass to the clientís living trust.

The same result occurs in the event that there are joint accounts, or other jointly-held assets (such as the family home), as to which the other owner does not survive. Those assets "pass through probate" in such an event, and do not automatically wind up in the clientís living trust.

One can place oneís home, securities, bank accounts, etc. in a living trust to avoid this result, but one cannot do so as to a retirement plan.

Does probate ties up an individualís assets for years?

Rarely.

Once the deceased individualís Will has been admitted to probate (which, as noted above, frequently is a matter of days or a few weeks), and the Executor or Personal Representative has been appointed and has collected the necessary assets, the provisions of the Will can be carried out. Interim distributions may be made to the same extent as they could have been made had the same assets been held in a living trust.

The statement, often made, that, unlike with a living trust, going through probate means that oneís assets will all be tied up, and kept from oneís beneficiaries, for years is almost always incorrect (unless there is litigation which, as noted above, may also occur if a living trust is used rather than, or in addition to, a Will).

Do living trusts provide privacy?

In some states the only way to obtain privacy as to the disposition of oneís assets is with a living trust. Missouri law, for example, provides that Wills, even under "Independent Administration", are part of the public record so that anyone can look at them. Such is also the case in most other jurisdictions. It is possible, however, in appropriate instances, to get a court order to have the probate file, including the Will, sealed so that the contents of the file are not available to anyone who happens to be curious.

It must be noted that, if real estate is involved, and has been transferred by the client (or, at his or her death, via his or her Will) to his or her living trust, it may be necessary, under state law, such as in Florida, to record either the entire living trust or at least a memorandum containing a summary of certain of the provisions thereof, thereby decreasing the level of privacy that a living trust can provide.

There is also the question of why one needs such a level of privacy in the first place. Is the client trying to hide assets? If the client has a beneficiary who has substantial debts he or she may want to keep the fact that the beneficiary will receive assets under the clientís Will from the beneficiaryís creditors, but, once the beneficiary is legally entitled to them, any such assets would have to be appropriately disclosed in any court proceedings, such as in connection with a bankruptcy filing or a divorce, or on a Medicaid application, anyway.

Several years ago, when Jacquelyn Kennedy Onassis died, the provisions of her Will (which went through probate) were spread all over the newspapers. Many people found them interesting. On the other hand, how many Wills would merit such press, so that, if one is considering utilizing a living trust to provide privacy, one must consider, privacy from whom?

Can living trusts preclude spousal rights?

In some states they can.

Under Illinois law, for example, it may be possible to deny a surviving spouse any share of his or her spouseís assets which were placed in a living trust prior to the first spouseís death.

So, too, in Connecticut.

There are a few other states which have similar rules, sometimes also made available to people who reside elsewhere, but some that had them no longer do (Florida, for example, revised its law so as to protect surviving spouses).

Any professional who is asked to counsel a client in this regard must be mindful of the rules regarding conflicts, since both spouses may be the professionalís clients.

What are other uses for living trusts?

Some clients have certain assets that they want to keep separate from their other assets. For example, inherited assets, such as family heirlooms, may be placed in a living trust so that they continue to pass down the family (subject to any spousal rights, if there is no pre or post-nuptial agreement) and are not mixed in with a clientís other assets.

Living trusts can also provide for the management of a clientís property. Some clients do not want to manage their own assets, and prefer using a living trust rather than one or more discretionary investment advisory accounts. Some people try out the bank or trust company that they expect to utilize to handle their eventual estates and any testamentary trusts by creating living trusts, funding them with a portion of their assets and then sitting back for a few years to watch how the bank or trust company performs.

In community property states, such as California, living trusts can be of extreme importance, particularly to keep the various classifications of property that exist in those states (e.g., community property, quasi-community property and separate property) apart from one another.

So which will it be - a living trust, a Will, or both?

The purpose of this article is to set forth some of the factors to be considered before a professional recommends to his or her clients whether to rely upon a Will, a living trust or both.

That recommendation should depend upon many factors, including the particular clientís desires, his or her assets, their location and their value, his or her demand, if any, for privacy, the ability to locate the clientís distributees, the prospect of a dispute, and, of considerable importance, the state in which the client resides. Living trusts, clearly, are far more beneficial for clients who reside in some states than for those who live in others, and the pros and cons thereof should be discussed with the client before any recommendation is made.

The content of this article does not constitute legal advice and should not be relied on in that way. Specific advice should be sought about your specific circumstances.

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In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaqís Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaqís Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaqís right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions