 |
What is a Living Trust?
A living trust is an entity (much like a
business) that holds title to your assets. You
still retain complete control of your assets and
may treat anything you own just as you did
before creating your trust, however, now you own
each asset as “trustee” of your Living Trust.
With all of your assets owned by your trust, at
death or incapacity, these assets are not
subject to a probate proceeding. (Probate
Information). WHY? Because your
entity, YOUR LIVING TRUST, holds title to
your assets...this allows you to transfer and/or
manage your assets during life and upon death,
through your living trust without court
interference.
Without proper estate planning,
including a living trust, the court will
“step-in” during incapacity or at death to
manage your financial affairs. When the court is
in control, no one is legally able to manage
your assets, not even your spouse, unless the
court appoints them. If you execute the proper
estate planning documents, you identify who has
legal authority to act on your behalf - taking
this decision out of government hands. In
addition to this loss of control, a Probate
Court Proceeding can cost thousands of dollars
more than the cost to privately execute a proper
estate plan (Probate Cost
Chart).
What Benefits Do Living Trusts Offer?
A properly executed and funded trust, will save
you and your beneficiaries thousands of dollars
and offers many important benefits, including:
-
Retention and Privacy of Family Assets and
Finances
-
Capital Gain Tax Savings
-
Death Tax Avoidance or Reduction
-
Probate Avoidance
-
Avoidance of a Court Imposed Conservatorship
(if you are incapacitated)
-
Avoidance of Joint Ownership Problems
-
Control of Distribution and Management of
Assets During Life and After Death
-
Estate Tax Avoidance or Reduction
-
Protects Minor Children from Court-Imposed
Guardianships
-
Protects Dependents with Special Needs
-
Living Trusts are Inexpensive, Easy to Set Up
and Maintain
-
Many other benefits of Living Trusts exist
depending on the unique characteristics of your
situation.
How is a Trust “Funded”?
Many Estate Planning Attorney’s simply draft the
necessary legal documents that make up an estate
plan, but, do not “fund” these living trusts.
This complicated task is frequently left for the
client to complete.
Funding is a process where title to each asset
is transferred from the name of an individual(s)
into the name of that person as “trustee” of
their Living Trust. This process transfers the
assets to the entity, the Living Trust, and the
trust is then “funded” with their assets.
 Our
attorneys have knowledge and experience funding
living trusts. Our office initiates the
“funding” process by sending out “funding
letters” to the respective financial
institutions necessary to transfer your assets
and fund your living trust. At The Law Offices
of Sydney C. Kirkland, we work with you and your
professional advisors to create Your Estate Plan
AND generate the necessary documents to evidence
your choices, inform others of your choices and
to enforce those choices, when necessary.
A Will is Administered Through the Probate
Court...What About Living Trusts? How are They
Administered? (Trust
Administration)
A Living Trust is privately administered by the
trustee, preferably with the
help of an attorney
experienced in trust and estate administration.
Administration involves paying any creditors and
distributing assets held in trust. Any
property/assets where title is held by a living
trust goes directly
to the beneficiaries, once the trustee completes
his or her trust administration
responsibilities. The costs to administer a
living trust are approximately 1-2% of the
estate. This is extremely less expensive than
the costs to administer an estate through
probate, which costs 4-10% of the estate
(where there is no living trust).
For more information and answers to questions
about living trusts, please go to the resource:
(Frequently Asked Questions About Living Trusts)
As life changes, so do your choices. This is why
Estate Plan Reviews and Estate Plan Updates are
just as important, as creating an Estate Plan,
for you and your family. (Estate Planning Quiz)
|
FAQs
