Creating a Trust (Trust Package $495)
Our Trust Package is a great option if you: own/mortgage a home or other real estate (or plan to in the future); you have kids and/or you have assets (including life insurance); and you want to avoid probate.
What is a Revocable Living Trust?
A Revocable Living Trust (Trust) is a legal document or “Living Entity” that allows an individual or couple to transfer ownership of real property and/or assets (such as a home, real estate, bank accounts, certificates of deposit, securities, life insurance, stocks, bonds, etc.) from personal ownership into the legal ownership of the Trust. A Revocable Living Trust is just what the name implies, a document that is created during an individual or a couple’s life, but that can be changed or terminated at any time. A Trust allows the trustors/grantors (the individual or couple setting up the Trust) to decide who will receive their assets, how much they will receive, and when they receive it. A Trust allows the trustors/grantors to choose their successor trustees, who their beneficiaries are and appoint guardians for any minor children.
If a Revocable Living Trust is set up correctly and all of the property and assets are properly transferred to the Trust, it will provide the following benefits: Avoid probate entirely; distribute property and assets to the beneficiaries almost immediately; ensure any minor or disabled children are cared for; handle financial affairs if someone becomes incompetent; and save money in federal estate tax and capital gains taxes.
Unfortunately, about half of all people who have living Trusts never complete the funding process, which practically negates the advantages of setting up a Trust. “Funding” is another way of saying “Transferring” assets to the Trust. Our documents include all the information and paperwork you will need to complete this process.
What will happen to my assets if I die with a Trust?
One huge advantage of a Revocable Living Trust is the control that the trustors/ grantors have on when, where and how the assets are to be distributed. For example: If John and Jane Doe do not want their beneficiaries receiving an outright distribution of the assets until they reach the age of 25, this could be stipulated in a Trust. This does not mean that the beneficiaries cannot use the money until they are 25, it simply means that the successor trustee(s) will be managing those assets until the beneficiaries reach the age of 25. Prior to reaching the age of 25, the assets may be used for health, education, maintenance and support.
In a Trust, the beneficiaries are the people and/or organizations to which you leave your assets. Most people have a pretty good idea of who their direct beneficiaries will be. Beneficiaries may be children, grandchildren, other family members, friends, charities, organizations, etc. Couples in second, or subsequent marriages may face more complicated decisions if there are children from a prior marriage.
THE PROCESS: With a Trust you select a successor trustee(s) to handle the business affairs and distribution of the estate after your death. The successor trustee could be one or more person(s) or entities, such as a bank or trust company. The successor trustee is usually a trusted friend or family member. A successor trustee locates the Trust after the trustors/ grantors death; files an inventory and appraisal of the property; pays any creditors, taxes, and fees; distributes the assets to the beneficiaries. Before selecting a successor trustee, the responsibilities need to be discussed with the individual or couple to see if they are willing and able to perform these duties. It is also a good idea to name an alternate successor trustee if, for any reason, the first choice cannot serve.
What will happen to my home (Real Property) if I die with a Trust?
First and foremost you must understand that you have to properly transfer your home (Real Property) into your Trust while you are alive. If you fail to transfer your property into the Trust, it will be subject to probate.
To transfer property into your Trust you must record a deed at the county recorders office. We can easily prepare this deed for you, or you can contact a title company and pay to have the title transferred.
If your real property has been correctly transferred into your Trust, your successor trustee will be able sell the property and avoid probate entirely.
After your death your successor trustee will take the Trust Agreement, proper photo identification, and a death certificate(s) into the title company who they are working with to sell the home. The title company will then transfer the title of the property into the successor trustee's name as follows: "Jack Doe, as Trustee of the Jane and John Doe Family Trust". The successor trustee can then sell the property (avoiding probate completely) and distribute the proceeds according to the guidelines in the Trust.
Who will act as Guardian for my minor children if I have a Trust?
An actual Trust does not provide for setting-up guardianship for minor children. However, we know this is a major step in setting-up a thorough estate plan and have included the proper documents you will need in the Trust Package we offer.
In our "Pour-Over" Will that we include in our Trust Package, you can select guardians for minor children. However, the individual or couple that you select cannot serve as legal guardian or conservator until approved by the court. (Any type of guardianship must be approved by the court.) Parents with children under the age of eighteen (18) have two estate planning concerns. The first is providing for the custody of their children should both of them die at the same time. The second concern is nominating a conservator (money manager) to supervise and manage any assets the child would inherit. The same person may fulfill both roles, or one individual may be named as the children's guardian and another as the money manager. It is always a good idea to name alternate guardians and conservators for minor children in case the first choice is unable to serve.
Providing care and support for children with a disability is also very important. Parents must choose a personal guardian to be responsible for the disabled child. Additionally, the parents must choose a financial manager to supervise any money or property they leave for the care of the disabled child for as long as the child lives.
Who will make medical decisions for me if I have a Trust and I become incapacitated?
A Trust doesn't cover this. However, our Trust Package includes a Medical Power of Attorney and Living Will that allows you to specify your wishes and who will carry them out for you if you become incapacitated.
Who will make financial decisions for me if I have a Trust and I become incapacitated?
Our Trust Package allows your successor trustees to make financial decisions for you if you are incapacitated regarding assets that are owned by the Trust. We also include a financial power of attorney that will allow your designated Agent to make financial decisions for you if you are incapacitated reagarding assets that are not owned by the Trust. (Note: two doctors must certify in writing that you are incapacitated.)
Please note: Your Durable Power of Attorney ends when you die.
How does my Personal Business work with a Trust?
Business interests should be transferred to the Trust by completing a transfer agreement called an Assignment. We provide this with our Trust Package.
Do Revocable Living Trusts offer liability protection?
Revocable Living Trusts do NOT protect property and assets from personal liabilities and nursing home costs. Since the individual or couple who formed it can change the Trust at any time, the income and assets in the Trust are considered available to cover nursing home costs under current Medicaid rules.