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  • What is a Living Trust and what are the benefits?
    A Living Trust is a "legal entity" that survives after you pass. You put assets into the Trust and it gets distributed to your beneficiaries according to the terms of the Trust. While both Husband and Wife are alive, you can revise, amend, or revoke the Trust at any time for any reason, and you can control the Trust however you like. The main benefit of a Trust is to avoid probate. If you die without a Trust, someone must distribute your assets through a Court process called probate. This requires starting a court action, taking an inventory of the person's assets, appraising those assets, and distributing the assets, all under court supervision. This will cost time and money. A Living Trust allows you to avoid this process, and the Trustee will distribute the assets pursuant to the terms of the Trust. Probate is a public process whereas distributing assets through a Living Trust is generally private.
  • What are the questions on the online intake form?
    Download the form here.
  • What issues do I need to think about?
    1. Who will manage the Trust after both spouses pass? You need to name at least one responsible adult and can name up to three responsible adults. 2. Who will take care of minor children after both spouses pass? You can name up to three responsible adults. Should this person be the same as the person who manages the Trust after both spouses pass? Some people like to keep both the same for practical reasons (the same person is responsible for the money and the children), some people like to split up the responsibilities (the guardian will need to request money from the Trust) either because one person is a better parent whereas the other is better with finances, or having the same guardian and trustee can lead to abuse (the person takes Trust assets under the guise of providing for the children). There is no right or wrong answer. 3. When one spouse passes, should that spouse's half of the assets go to the other spouse or to the children? If the assets go to the other spouse (no Bypass Trust), the assets could be used up before it goes to the children (or if the spouse remarries it could be used to support a new spouse). If the assets go to the children (Bypass Trust), the surviving spouse may not be able to use the assets if needed. A Bypass Trust is not recommended because it can create problems and significant additional work for the surviving spouse. A Bypass Trust requires that the surviving spouse split the Trust assets into two trusts when one spouse passes, a Bypass Trust and a Survivor's Trust. Half the assets go to the Bypass Trust which becomes irrevocable and restricts the surviving spouse's use of the assets, increases costs, and requires the filing of tax returns. Half the assets remain with the surviving spouse in the Survivor's Trust and then go to the Bypass Trust for distribution when the surviving spouse passes unless it is amended. The benefit of no Bypass Trust is that it provides for flexibility for the surviving spouse to use Trust assets and handle unforeseen circumstances. The benefit of a Bypass Trust is that it helps ensure your children or beneficiaries will receive at least part of the assets because it restricts the surviving spouse's use of the assets. 4. When both spouses pass, should each child get a distribution when he or she reaches a certain age (and what is that age) (no Pot Trust), or should the distribution occur when the youngest child reaches a certain age (Pot Trust). A Pot Trust keeps the assets in the Trust until the youngest living child reaches the distribution age. A Pot Trust is recommended for a family with young children near the same age or if the main Trust asset is real property. A Pot Trust also provides the Trustee flexibility to spend according to the children's needs. If you want to ensure that the Pot Trust will pay for education through college (assuming there are enough assets), then you want to choose a distribution age that is after college graduation. For example, if you choose 18 as the distribution age, the Pot Trust might be used to pay for an older sibling’s college education, but the 18 year old will need to pay for his education out of his own individual share after 18. This should not be a problem if you choose 25 as the distribution age because then youngest child should have graduated college by the time he or she turns 25 and there is a distribution. If there is no Pot Trust, then each child will receive a distribution when he or she reaches the distribution age. This can be problematic if the main Trust asset is a house, one child will get the distribution when he or she turns a certain age but the other child will not. A Pot Trust can also be problematic if there is a great difference in age between children, if one child is 28 (or the distribution age) and seeks a distribution he or she will need to wait until the youngest child turns 28 (or the distribution age) for the distribution, and perhaps the 28 year old is ready to start a family and could use the distribution. 5. What assets to transfer to the Trust? (e.g. home, bank accounts, etc.) You can choose the generic transfer all assets template which is recommended, as you still need to change the title to your home, bank accounts, etc. to complete the transfer and fund your Trust. 6. Who will be the executor or administrator of your Will? Your spouse? Any alternates? 7. Who will make health care decisions on your behalf? Your spouse? Any alternates? 8. Do you want to prolong life? 9. Do you want to donate organs? 10. Who will have the power to sign on your behalf and make financial decisions on your behalf while you are still living, if anyone? Your spouse? Any alternate?
  • When should I update my Living Trust?
    1. Change in marital status 2. Birth or adoption of a child 3. Death of a beneficiary or successor trustee 4. Significant change in financial status 5. Significant change in tax law
  • What is the difference between your service and a $3000 estate planning attorney?
    This service is not legal advice and not a substitute for legal advice from an attorney. This is a self-help service at your direction to help you create an estate plan. We assist in preparing non-complex estate plans at a fraction of the cost of an estate planning attorney. However, we do not provide legal advice. Often, an attorney’s expertise is needed for more complex estate plans (prior marriages, prior children, disinheriting to children, special needs child, etc.) and charge a flat fee as if those services are needed. We are targeting those who need a basic but customizable estate plan (no prior marriages, not disinheriting children, provide equally to all children, less than $20 million in assets, etc.) and pricing our self-help service accordingly. You can start off with a more basic estate plan and use the services of an estate planning attorney as you build more wealth and need more specialized services. If you want to speak with an estate planning attorney, email me for a referral.
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