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FAQs

What is a "Living Trust"?

What should I consider before I begin?

What if I need to make changes or the tax laws change?

Why do I need an estate plan?

If I don't create an estate plan, won't the government provide one for me?

What is the difference between a Will and a "Living Trust"?

If I set up a Living Trust, can I be my own trustee?

Is a Living Trust valid in all states?

Isn't a Living Trust only for the rich?


What is a "Living Trust"?

A trust is merely an agreement, like a contract, between two parties. The person establishing the trust (the "Settlor" or "Trustor") and the person holding the property (the "Trustee") hold property for the benefit of another (the "Beneficiary"). In a typical living trust, these three legal "persons" are the same person; you. The term "living trust" means that the trust is established and funded during your lifetime, as opposed to a testamentary trust which is created in your will and must go through probate to be funded. In order for a trust to be a valid, binding instrument; all that is necessary is for the parties executing it to have the legal capacity to enter into a contract, including age and competency, and for the trust to actually own something (the "corpus"). To fund the trust, you can assign, deed and transfer your assets into the existing trust, including your real property. Once the trust is signed, dated and acknowledged by a Notary Public, it is in full force and effect. Neither your trust nor your will need to be recorded, with the exception that the deed transferring real property is usually recorded with the applicable Recorder's Office.

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What should I consider before I begin?

You should decide on:

  • Who will be the successor trustee in the event of death or incapacity;
  • If you have minor children, who should be the Guardian;
  • Who will make health care and financial decisions for you if you cannot make them yourself; and
  • How your estate will be distributed at your death.

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  • What if I need to make changes or the tax laws change?

    As mentioned above, as part of the process, you will register with us; after you become a client, if there are any changes in federal and/or state law which may affect your trust, you will receive notification. Should a change be necessary, you can create a Restated Amendment at any time in the future. A Restated Amendment completely rewrites your estate plan; so it will have all the new language if there have been any legal changes which would affect your trust; and will allow you to implement any changes you need to make to keep your trust current. However, the Restated Amendment keeps your existing trust name and date, so you do not need to re-title any of the assets already titled in the name of the existing trust.

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    Why do I need an estate plan?

    Most of us spend a considerable amount of time and energy in our lives accumulating wealth. With this, there comes a time to preserve wealth both for your enjoyment and for future generations. A solid, effective estate plan ensures that your hard-earned wealth will remain available for your care and will remain intact when it passes to your beneficiaries.

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    If I don't create an estate plan, won't the government provide one for me?

    Yes. But your family may not like it. The government's estate plan is called Intestacy and guarantees government interference in the disposition of your estate. Documents to appoint an Administrator must be filed with the Probate Court and their approval must be obtained. If you fail to plan for your estate; you lose the opportunity to protect your family from a complex process that can be timely and costly; and which might have unwanted consequences in the distribution of your estate. Additionally, you have to consider estate taxes. There is much you can do in planning your estate that will reduce and can even eliminate estate taxes.

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    What is the difference between a Will and a "Living Trust"?

    A Will is a legal document that describes how your assets should be distributed in the event of death. The actual distribution, however, is controlled by a legal process called probate, which is Latin for "prove the will." Upon your death, the Will must be filed with the Probate Court and becomes a public document available for inspection. Probate can be cumbersome, time-consuming and expensive. A Living Trust avoids probate because if your assets are properly placed in the trust, the trust becomes the owner of that asset. Like a corporation, a trust is not a living person, so if your trust owns your assets, technically there's nothing for the probate courts to administer. Whomever you name as your "successor trustee" gains control of your assets immediately upon your inability to act as trustee and they are distribute your assets exactly according to your instructions. There is one other crucial difference: A Will doesn't take effect until your death, and is therefore no help to you during lifetime planning, an increasingly important consideration since Americans are now living longer. A Living Trust offers protection should you become disabled. Please note that even with a Living Trust, you should still have a Will known as a "pour-over will"; which makes sure that any assets not in your Living Trust at the time of your death, "pour-over" into the trust to be distributed with the other trust assets. Your Trust Package will include all of the necessary estate planning documents including a "pour-over will".

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    If I set up a Living Trust, can I be my own trustee?

    Yes. In fact, most people who create Living Trusts act as their own trustee. If you are married, you and your spouse can act as co-trustees. During your life, you will have absolute and complete control over all of the assets in your trust. In the event of a mentally disabling condition, your hand-picked successor trustee assumes control over your affairs.

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    Is a Living Trust valid in all states?

    Yes, the Living Trust we prepare valid in all fifty states, plus the District of Columbia.

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    Isn't a Living Trust only for the rich?

    No. A Living Trust can help anyone protect his or her family from unnecessary probate and court costs, and federal and state estate taxes. Any person with an estate large enough to require probate will derive meaningful benefits from a Living Trust.

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