What is a Living Trust?   

A living trust is a legal document that, just like a will, contains your instructions for what you want to happen to your assets when you die. But, unlike a will, a living trust avoids probate at death, can control all of your assets, and prevents the court from controlling your assets if you become incapacitated. 

What are some benefits to having a living trust? 

• Avoids probate at death, including multiple probates if you own property in other states
• Can control who gets your property and how they get it
• Provides maximum privacy
• Quicker distribution of assets to beneficiaries
• Can reduce or eliminate estate taxes
• Inexpensive, easy to set up and maintain
• Can be changed or cancelled at any time
• More difficult to contest
• Can protect dependents with special needs
• Prevents unintentional disinheriting and other problems of joint ownership
• Peace of mind

Should I have an attorney do my trust?

Absolutely, but not every attorney can do the job correctly. A local attorney who has considerable experience in living trusts and estate planning will be able to give you valuable guidance and peace of mind that your trust is prepared and funded properly. We’ve seen many “Do It Yourself” Trusts. We haven’t yet seen one that can positively compare to those done by a competent Estate Planning Attorney.   

If I have a living trust, do I still need a will?

Yes, you need a "pour-over" will that acts as a safety net if you forget to transfer an asset to your trust. When you die, the will "catches" the forgotten asset and sends it into your trust. The asset may have to go through probate first, but it can then be distributed as part of your overall living trust plan. Also, if you have minor children, a guardian will need to be named in the will. 

Does transferring all of my property into my trust make me eligible for Medicaid?  

There are many benefits to having a living trust, but it is not used for Medicaid planning. An estate planning attorney who is knowledgeable about Medicaid laws can help you wade through the criteria of Medicaid eligibility.   

Is it hard to transfer assets into my trust? 

No, and your attorney, trust officer, financial adviser and insurance agent can help. Typically, you will change titles on real estate, stocks, CDs, bank accounts, investments, insurance and other assets with titles. Most living trusts also include jewelry, clothes, art, furniture, and other assets that do not have titles. Also, beneficiary designations on some assets (like insurance) should be changed to your trust so the court can't control them if a beneficiary is incapacitated or no longer living when you die. (IRA, 401(k), etc. can be exceptions.)   

Doesn't this take a lot of time?

It will take some time -- but you can do it now, or you can hire us to do it for you. Your other alternative is to pay the courts and attorneys to do it for you later. One of the benefits of a living trust is that all your assets are brought together under one plan. Don't delay "funding" your trust. It can only protect assets that have been transferred into it.   

Should I consider a corporate trustee?   

You may decide to be the trustee of your trust. However, some people select a corporate trustee (bank or trust company) to act as trustee or co-trustee now, especially if they don't have the time, ability or desire to manage their trusts, or if one or both spouses are ill. Corporate trustees are experienced investment managers, they are objective and reliable, and their fees are very reasonable given what they do. (Personally, we think corporate trustees are one of the best bargains out there and would be happy to explain why.) If something happens to me, who has control? If you and your spouse are co-trustees, either can act and have instant control if one becomes incapacitated or dies. If something happens to both of you, or if you are the only trustee, the successor trustee you personally selected will step in. If a corporate trustee is already your trustee or co-trustee, they will continue to manage your trust for you.     

What does a successor trustee do?   

If you become incapacitated, your successor trustee 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 resume control. When you die, your successor trustee pays your debts, files your tax returns and distributes your assets. All can be done quickly and privately, according to instructions in your trust, without court interference.

How does a living trust avoid probate and prevent court control of assets at incapacity?   

When you set up a living trust, you transfer assets from your name to the name of your trust, which you control. For example, from "Bob and Betty Brown" to the "Bob and Betty Brown Trust." Legally because ownership is in a trust there is nothing for the courts to control when you die or become incapacitated. The concept is very simple, but this is what keeps you and your family out of the courts.     

Do I lose control of the assets in my 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's why it's called a revocable living trust). You even file the same tax returns. Nothing changes but the names on the titles.     

Does everyone need a Living Trust?   

No. Whether you need a living trust depends on a variety of factors such as your marital status, the size of your estate, whether you have property in more than one state and your age and health.