Is there an advantage to naming a corporate trustee?
If you do not believe that you have the ability or time to manage your own trust, it is appropriate to name a bank or other financial institution to do so. While recognizing that corporate trustees are very experienced, you must also recognize that there is a cost involved. Such fees are very reasonable considering the amount of expertise that corporate trustees have.
Who takes control of my living trust if I become incapacitated?
If you are married and your spouse is named as a co-trustee, such spouse would have instant and complete control of your trust. If you and your spouse both become incapacitated, then the person you named as alternate or successor trustee would step in and take care of your trust. The successor trustee can be a spouse, other family member, friend, or corporation. The successor trustee can use your assets to pay bills, manage your financial affairs, and oversee your care for as long as necessary. If you recover from your illness or incapacity, you would immediately regain control of your trust. Upon your passing, the successor trustee would pay debts, distribute your assets according to your wishes in the trust, and would take all necessary steps to administer the wishes contained in such trust. This is usually a quick process that is done without court intervention or the necessity of probate.
Does the living trust end after I die?
A living trust can continue after your death if you draft such intentions in the trust. The assets stay in your trust and are managed by the person or corporate trustee you have chosen until your beneficiaries reach the ages you have chosen for them to inherit the proceeds. For example, if you should pass away and your son or daughter is 14 years old and you have provided that such son or daughter receive proceeds until his or her 25th birthday, the successor trustee would manage the trust funds, according to the laws of your state, until such son or daughter reaches the age of 25. At that time, the remaining proceeds would be left to your son or daughter since they have reached the age of majority. A living trust can also be used to tend to the special needs of another family member after you are gone.
How can a living trust save on estate taxes?
The present law states that if you should pass away in 2002 or 2003 and your estate is valued at more than $1,000,000.00, at least 41% must be paid in federal estate taxes. However, if you are married, your living trust may provide for gifts from you and your spouse to various loved ones. The amount removed from your estate up to $2,000,000.00 could pass tax-free. This could be a significant saving well in excess of $400,000. Most importantly, if you have an estate that is worth more than one million dollars, you absolutely should consult with an estate-planning professional who is well versed in the area of estate tax law.
How does a trust in a will compare to a living trust?
Trusts that are set up in wills are created to provide for your family members, loved ones, and any minor children when you die so that they inherit at an age designated by you. In other words, some of the funds are used while they are in their minority, and then the remaining funds are disbursed and distributed to them when they reach the age of majority which could be any age designated by you. Trusts may also provide for succeeding generations of your family to inherit and may even provide for descendants yet unborn. These trusts do not go into effect until you die. A living trust, however, can take affect at the moment you set the trust into existence. With a trust that is contained in a will, there is usually no protection from you losing control of your assets if you become incapacitated. However, if you have a living trust, you have protection because you can designate a co-trustee or successor trustee.
How expensive is it to have a living trust prepared?
It is usually not very expensive to prepare a living trust. It depends on how complicated your estate plan is, how much money is contained in your estate, how much property you have, and how many people you wish to have designated as trustees, beneficiaries, etc. The important thing to do is to ask your attorney for an estimate before you have the actual paperwork prepared. You should recognize that when you consider that a properly drafted trust will avoid family fights inside and outside of court, it is a lot less expensive when compared to the actual court costs and attorneys fees that can occur when you do not have a living trust and then become incapacitated.
Who should I contact to prepare a living trust?
It has been recommended throughout this booklet that you obtain the services of a respected and knowledgeable attorney who is experienced in the area of trusts, estate, and probate. An attorney experienced in the area of estate planning can take care of your living trust and estate planning needs so that you are assured of having things occur as you intended. You would not hire a patent attorney to handle your living trust just as you would not hire a brain specialist to perform surgery on your foot. In some states, there are paralegals or independent legal technicians who can prepare trust documents but they cannot give legal advice. To make sure that you have a will or trust that is appropriate under your own state laws, you should seek the services of an attorney in your state.
Is it wise to have a will prepared even if I have a revocable living trust?
The answer to this question is yes because a will would come into effect in case you have forgotten to transfer a certain asset to your trust. If you pass away, a will can provide for any property or assets that you may have forgotten about with respect to your trust. It may be necessary for that forgotten asset to go through probate first, but it can then be distributed as part of your living trust.
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