Why you need a Living Trust.
A Living Trust is not a Will. While a Will sets forth your instructions for distribution of your estate after your death, a Will must be filed with the court and subjected to a process called "Probate." This process is required in order for the court to determine many factors, such as the legality of the Will, the inclusion of proper heirs, sale of assets, etc. The property will generally not be distributed until the process is terminated, which can take at least a year. If any heirs are fighting over terms then it can go on for many years. The cost of a probate (lawyers' fees and court administration fees) will typically range from 6-10% (or more) of the value of the estate, and this is money that should have gone to your heirs. Often property must be forced-sold in order to pay these costs. A typical Will can range from $200 to $500 to prepare, depending on complexity.
A LIVING TRUST is an approximately 40-60 page legal document by which you (the Trustor) also determine how your property is distributed after your death. But there is no Probate nor other court approval required, so there are no probate fees. This is the major difference between a Will and a Living Trust, and the reason for having a Living Trust.
Once your Trust is established, legal title to your real estate and most personal property is transferred to the Trust. We prepare the transfer documents for you. This way, upon your death there is no property in your individual name, so there is nothing to probate. There are many provisions in the trust to protect the trust assets as well as to protect the beneficiaries, establish trustee powers and other obligations and to assure that all terms and conditions set by you are satisfied.
During your lifetime, you are the Trustee and you maintain full control of your property. So you can sell, exchange, remodel, give away or mortgage the property just like you could do now without the Trust. Upon your death, your successor Trustee, which you selected, takes over the Trust for the purpose of distributing property as you have instructed.
My firm's Living Trust Package is tailored to your needs and typically includes the Living Trust, a Certification of Trust, a Trust Property Inventory, a Pour-Over Will, a Durable Power of Attorney, an Advanced Health Care Directive and Instructions for the Trustee.
- The Certification of Trust is a short document that affirms the existence of the Trust and the named successor Trustee. It is used in place of a copy of the full trust when making financial transactions with financial institutions.
- The Trust Property Inventory sets forth all the property owned by you and/or by the Trust.
- The Pour-Over Will is prepared only for the purpose of leaving to the Trust any property you might have obtained later and forgot to transfer to the Trust.
- The Durable Power of Attorney names the person who will be your attorney-in-fact, or legal representative, in the event you become incapacitated and cannot personally handle your own affairs, such as receiving and depositing checks, paying bills, etc. If you regain your capacity to do these things, then the Power of Attorney is suspended.
- The Advanced Health Care Directive is a medical power of attorney which provides the name of the person you have placed in charge of making medical decisions in your place if you become incapacitated and cannot make your own decisions (i.e. in a coma). This is also the document wherein you would state your desire to be removed from artificial life-support systems under specific circumstances. There are many provisions in this document for your care and comfort should you be hospitalized for an extended period of time.
- The Instructions for the Trustee explain to the successor Trustee what needs to be done upon your death.