Enhancing Your Estate Plan with a Living Trust
Do I need a Trust or a Will? The answer to this question depends on a number of factors, and almost always, the answer is – you need a Trust.
What Is a Trust?
A Trust is a legal relationship, usually evidenced by a written document (essentially, a contract) called a "Declaration of Trust" or "Trust Agreement," whereby a person, called the "Settlor," "Grantor" or "Trustor" transfers property to a "Trustee," who holds the property for the benefit of "Beneficiary."
In a revocable living trust, the same person may occupy all position. For example, in the typical living Trust, as long as the Settlor is alive, he or she is also the Trustee and Beneficiary of his or her Trust.
On the death of the Settlor, a named Successor Trustee takes over, and follows the Settlor's instructions set forth in the Trust concerning the distribution of property. As such, the Trust remains the owner of property (during and after the death of its creator), and only the Trustees change.
Living Trusts and Probate Avoidance
Living Trusts avoid Probate with respect to those assets that are transferred into the living Trust before the Settlor's death. Even though no court procedure is involved, that does not mean there is nothing to do for a Trustee. The living Trust makes administration easier, but it does not do away with administration altogether.
For example, assets still must be collected and managed by the Trustee pending distribution to the Beneficiaries; appraisals of property have to be obtained; debts and taxes have to be paid; tax returns are required; trust accounting - presented to the Beneficiaries, and legal documents must be prepared in connection with the distribution of the Trust property to the Beneficiaries.
These activities are very similar to a Probate. The major difference is that, with a living Trust, everything is handled privately, without court supervision, and without making the assets of the Decedent a public record. This makes trust administration much quicker, more private, and most importantly - a whole lot less expensive than going through Probate.
There is also a popular misconception that the existence of a living Trust avoids all possibility of court involvement. This is true (in part) only if all the Settlor's assets were properly transferred into the living Trust - which is known as "funding" the Trust. However, if assets remain outside the Trust at the Settlor's death, it is likely that this might trigger Probate administration.
How The Law Offices of Maria N. Jonsson, PC Can Help
Many of the Trusts we create are for traditional nuclear families, but we also assist:
- Unmarried couples
- Single or divorced individuals
- Same-sex couples
- Blended families
- Married couples where one (or both) receive a large inheritance
We understand that every client's situation is very unique, which is why we customize each estate plan to suit each person's particular needs.
Our attorney has over two decades of experience, and she looks forward to putting that experience to work for you and your loved ones.