No one gets off the planet alive. Everyone needs to investigate for themselves what their desires may be in order to cope with the inevitability of death. These are personal preferences. Investigate the basics to even begin your discussion of the options in estate planning. A sound estate plan can include a will or a will and a trust; and a power of attorney for healthcare purposes; and a power of attorney for financial purposes.
A Trust Explained
A trust holds legal title to that which you own, so purposefully you do not “own” it. If you don’t own anything, your existence is not a necessary ingredient to passing on ownership! Avoiding “ownership”, avoids a probate court appointment of a lawfully-recognized “stand-in” who passes on your wealth. Your own personal mental capacity is also not a necessary ingredient to using your hard-earned wealth; a successor trustee has the job if you can’t do it for yourself. This is an excellent vehicle for established and stable wealth management.
A young, growing family might achieve sufficient protection from Will instruments that incorporate trust provisions for underage children, something known as “support trusts.” Another name for this instrument is a Contingent Trust Will.
In a Contingent Trust Will there is no current transfer of wealth. Therefore, you will avoid an ongoing administration until you are equipped with the time and the knowledge to handle it, like a personal hobby. You can always construct an immediate transfer of wealth at a point in the future that you choose. The “contingency” is the age of your children. If one spouse dies and the other survives, the survivor will keep all wealth and will handle all needs and, of course, the reverse is true. If both spouses suffer an “early” death, then, the trust “kicks in” to hold wealth, but only if the children are below your selected age, like 18, or 21, or 25. So, this is an excellent vehicle for young, growing families, inclusive of the most important idea for such families, namely guardianship appointments.
Do You Need a Living Trust?
I cannot count the large number of clients I have seen who have estate planning instruments and never used them. Administering a “living trust” takes knowledge and attention, particularly when one shuns lawyer fees. In my way of thinking, families nurturing children have little time to devote to estate planning. Further, families building wealth make changes much more rapidly than families preserving it. In the absence of significant wealth, I think the twenties and thirties and even the forties can be a little early to establish an estate plan founded on a Living Trust instrument. I know that attorneys differ, but one in those age groups might be burdened more than benefited by a “one-size-fits-all” solution. Since a Living Trust must be managed throughout the years of its existence, like a corporation, I hesitate to burden anyone with that kind of structure unless they can identify a need or unless they are knowledgeable of what they are getting!
No one “needs” a living trust, but you or your circumstances may have or generate a compelling desire. Avoiding probate administration in court doesn’t equate with avoiding lawyers. Having a “living trust” doesn’t mean ignoring its need for administration, both before and after death.
What about protecting your assets while living? What risks do you face? We can assist in analyzing your financial objectives, designing methods of holding wealth, minimizing creditor claims, and defending yourself in creditor relations, even to the extent of bankruptcy relief.
[NOTICE REGARDING BANKRUPTCY CASES ONLY: This firm provides bankruptcy counsel and representation and is a federally –designated “Debt Relief Agency” under the United States Bankruptcy Laws.]