SAFE IS YOUR ESTATE?
Today as society gets older,
we are finding that more and more people are becoming
unable to take care of their own affairs. When this
happens, normally the court must appoint a conservator
to manage your affairs. Without planning, a court
proceeding is required. This is time consuming,
expensive and very public. With planning you can
avoid a conservatorship. This planning involves
preserving your estate during your lifetime. You
have three options to choose from when planning
your estate: (1) Intestate ( no will); (2) Testate
Succession (by Will); (3) the Revocable Living Trust. After
your death, there will always be some fees and some
taxes which have to be paid. This is true with or
without planning. The fees and taxes will normally
be significantly lower with planning. Probate is
public, expensive and time consuming. The Revocable
Living Trust can help avoid probate of the assets which
are in the trust.
What is a Living Trust?
living trust is a legal document that takes the
place of a will. It does everything a will does,
plus much more. Not only does the living trust
make sure your assets go to the people you choose,
it also allows you to avoid probate, eliminate
or reduce taxes, and avoid a conservatorship proceeding
if you become incapacitated.
Do I lose any control over my assets?
not. You name yourself as trustee, and so you
control all your assets as before. You report
to no one. You can change or revoke the trust
at any time.
What happens if I cannot act as trustee?
the trust document you will name someone, typically
a family member or a close friend, to take over
for you if something happens to you. We call this
person the "backup trustee". This person has nothing
to do with the trust and its assets unless and
until you become incapacitated or pass away.
What if I own out-of-state real estate?
you do not have a living trust, your heirs will
likely have to go through two probates, one in
your residence state, and one in the state where
the property is located. A living trust allows
you to avoid probate in both states.
Can't I avoid probate with Joint Tenancy?
married couples, having their assets in their
names as joint tenants does avoid probate upon
the death of the first of them, but there is typically
a high income tax cost to the surviving spouse
upon resale since you lose the benefits of stepped
up income tax basis. Additional problems will
arise when the second spouse dies, or if both
spouses die together - a probate will still be
required at that point. There
are also many problems caused by owning property
in joint tenancy with a child. For example, your
child's creditors might try to seize your property.
Also, at your death, your property could end up
going to only one of your children at the expense
of your other children or grandchildren. A living
trust can avoid all these problems.
Why do I want to avoid a conservatorship?
science is making great strides, but an unfortunate
consequence of longer life spans is that an increasing
number of older people are unable to fully manage
their own affairs. If you become incapacitated
by a stroke or some other cause and do not have
a trust and durable powers of attorney, your family
will have to petition the courts to have a conservator
appointed for you. This is a very public, expensive
and time consuming process and can ususlly be
completely avoided by a trust and durable power
Are there any ongoing costs or maintenance?
there are no additional charges once the trust
has been set up, unless later on you want to amend
the terms of the trust. You do not need us to
add or delete property from the trust. Also, transferring
property in or out will not change your property
taxes nor do you need to file special Income Tax
How long have Trusts been around?
have been used since the end of the Middle ages
in England to avoid the Kings death taxes and
in the USA since the origination of the country.
We feel confident that in the future nothing will
be done that will change its clear advantages
as the key estate planning device of choice.
do not hesitate to e-mail me any specific questions
on our response form.
We will attempt to answer them and e-mail the answers
back to you. If you prefer, you can call us anytime
760-732-3257 or Fax at 760-510-3968