The Estate Plan
Understanding Living Trusts
This can be the linchpin of many long-term financial plans. To successfully protect your assets from Estate and Income taxes upon death should always be a consideration when doing financial planning. Based on current and future financial goals and objectives, a Living Trust can offer the best opportunity to accomplish this goal. To successfully offer protection, and heirs later, all of your hard assets should be placed in a Trust. The information on this and the following page may answer most questions regarding Trusts. That said, there is no substitute for qualified legal advice. We always recommend that our Clients discuss the particulars of their legal situations with qualified counsel.
There is a simple and proven alternative to a Will – the Revocable Living Trust. It avoids probate, and lets you keep control of your assets while you are living – even if you become incapacitated – and after you die. Below are a few of the most widely asked questions along with a brief explanation of each.
What is probate?
Probate is the legal process through which the court sees that, when you die, your debts are paid and your assets are distributed according to your Will. If you do not have a valid Will, your assets are distributed according to state law.
Do I lose control of my assets in a Trust?
Absolutely not. You keep full control. As Trustee of your Trust, you can do anything you could do before-buy/sell assets, change or even cancel your Trust (that is why it's called a Revocable Living Trust). You even file the same tax returns. Nothing changes but the names on the titles.
Does my Trust end when I die?
Unlike a Will, a Trust doesn't have to die with you. Assets can stay in your Trust, managed by the person or Corporate Trustee you have chosen until your Beneficiaries (including minor children) reach the age(s) you want them to inherit, or to provide for a loved one with special needs.
If something happens to me, who has control?
Your handpicked Successor Trustee will step in. Your (ST) can be anyone, such as, children, other relatives, or trusted friends. If you choose an individual, you should name more than one in case your first choice is unable to act.
What does a Successor Trustee do?
If you become incapacitated, your (ST) looks after your care and manages your financial affairs for as long as needed, using your assets to pay your expenses. If you recover, you automatically resume control. When you die, your (ST) pays your debts and distributes your assets, without court interference.
To see the differences between a Living Trust, a Will and not having any protection at all…click here
