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This section covers the following topics:

Living Trusts
Wills
Probate
Joint Tenancy Title Holding

LIVING TRUSTS

1) If I have a Will, do I still need a Living Trust?

Yes. For most people, the main purpose of a Living Trust is the avoidance of the high Probate fees and costs usually incurred by not having one.

2) What is a Living Trust?

A Living Trust is a contract between its creator and its trustees which holds title to assets and distributes those assets at its creator's death(s). Thereby avoiding a court process to transfer those assets to a person's heirs at their death.

3) Is a Living Trust less costly than a Will.

No. Not in the short run, but usually it is much cheaper in the long run. Initially the trust is more expensive to create, but it avoids the costly Probate fees and probate costs incurred by a Will at death required through the probate process.

4) What are the benefits of a Living Trust?

The benefits of a Living Trust over a Will are: Privacy, usually a lower cost to the estate, usually less time until distribution of assets, avoids a probate, can avoid estate taxes in many cases, prevents the court from controlling a minor's estate until adulthood, can schedule distributions over time and can protect assets left to disabled heirs from being taken by or controlled by the government.

5) Is it difficult to transfer my assets to a Living Trust?

No. Each asset requires a different method of transfer to obtain its title in the trust. However experienced attorneys can easily accomplish the transfers for you.

6) Is a "Living Will" the same thing as a Living Trust?

No. A living Will is a document dealing with medical issues. Whereas a Living Trust is a document dealing with financial issues.

7) Can I draft my own Trust?

No. Trusts are very complex documents requiring advanced legal training to correctly draft. Many legal terms and words do not possess their "lay" meanings or interpretations and cause incorrect usage or interpretation by lay persons. Many words and terms require advanced knowledge in several areas of the law to be correctly applied to a set of facts and many important issues are left out because of a lack of knowledge as to their requirement in the document.   

8) Can I change my trust?

Yes. Your trust can be easily changed at any time during your life. Again a legal professional needs to be consulted for the reasons above stated in question 7 to complete the change document correctly.

9) Can I schedule asset distributions at certain ages beyond my death?

Yes. Any age can be set forth or multiple ages with multiple distributions can be scheduled.

10) How long does preparation of a Living Trust take?

Usually, several weeks once all decisions are made.

WILLS

1) What is a Will?

A Will is a legal document which directs the Probate court on how you want your assets distributed at your death, to whom you want those assets to go to and in what amounts. Whom you want to represent your estate through the Probate process in court and informs the court of your family relationships.

2) What happens if I do no estate planning?

The State will impose its intestate statutes upon your estate and make presumptions as to who gets your estate, in what amounts they receive your assets and who will represent your estate in court. These presumptions may not be your intentions. But your estate will go through a Probate process and be subject to the Probate fees and costs just as if you had a Will.

3) I have a Will, what happens if I become mentally incapacitated?

A Will does not address incapacity, it deals with after death issues. A power of attorney for business is needed to address financial issues and a power of attorney for healthcare is needed to address health issues. Incapacity is a pre-death issue.

4) Can I draft my own Will?

No. As with a trust. A will is a complex legal document requiring advanced legal knowledge in order to apply your specific facts to your specific desires. Many words and interpretations do not posses their "lay" meanings, are misapplied by lay persons and many required issues are left out by lay persons, because they do not realize that these issues must be addressed in a Will.

5) Can I give my property to my heirs before my death?

Yes. But you have created a gift for which a gift tax is owed on which penalties and interest may accrue if you do not immediately notify the government of the gift and pay any taxes due. You are responsible for paying the gift tax owed and you have a very small gift tax free amount before the tax begins to apply to the gift amount. Lastly, once you give the gift to an heir it is their asset and you may not get it back or it may get spent.

6) Can my assets be given to my heirs beyond my death?

Yes and No. Not without a trust contained within your Will. Once the probate process is completed the assets are distributed. If your Will contains a trust within it, the trust is administered through the court process requiring additional court supervision and adding more probate costs to be paid by your estate.

PROBATE

1) What is Probate?

Probate is a legal court supervised procedure that ensures that your debts are paid, notice of the court process is given to all interested persons, your assets are distributed according to your Will or according to State statutes if you do not have a Will and the entire process is public record.

2) What are the costs of Probate?

Probate costs are set by statute and they are high. Both the attorney handling your estate and your estate representative get the same statutory fee for their work performed. Additionally there are costs that must be paid prior to distribution to your heirs. Court filing fees, publication fees in the local newspaper, appraisal fees, recording fees and bond fees are the usual additional costs of probate.

3) How long does a Probate take?

The statutory time period is approximately 6 months if everything were to go perfectly. However, 7 months is the norm for estates that go perfect. If real property needs to be sold or other problems arise, the time period becomes much longer.

JOINT TENANCY TITLE HOLDING

1) Why can't I just hold title to my assets in joint tenancy with my heirs?

You can hold title to property with your heirs. However, your heirs can sever the joint tenancy holding by selling all or a part of the asset without your knowledge. Your heirs creditors could legally come after the asset to settle their unpaid debts. The IRS may come after you for unpaid gift taxes. A joint tenancy holding with a spouse could cause capital gains taxes to be paid that could be avoided through the use of a community property holding with a spouse.

Still have questions? Please contact me to go over your particular situation and needs.

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Questions?

What is a Wealth Replacement Trust? 

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  Legal Information Is Not Legal Advice. The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. I invite you to contact me and welcome your inquiries. Contacting me does not create an attorney-client relationship. Please do not send any confidential information to me until such time as an attorney-client relationship has been established.