Living Trusts Attorney
How should you go about leaving assets behind that your loved ones can benefit from? A living trusts attorney can help you figure that out. Your attorney may even be the one who suggests that you use a living trust to protect your assets.
Is a living trust the best option for you and your loved ones? That is the question we will answer in this article.
We will also discuss the process of creating a living trust if you are interested in establishing one for your family. Please read on if you wish to learn more about living trusts and the value they provide.
What is a Living Trust?
A trust is one of the tools you can use for estate planning and administration. You can transfer the assets under your name into a trust. From there, a trustee will be in charge of managing those assets.
The trust can effectively serve as a holding receptacle for your assets. Your assets can stay there until such time that you designate them for distribution to your loved ones.
Establishing a trust makes a lot of sense if you want to protect assets that are going to your young children. It can still be useful even if your beneficiaries are older.
A living trust is one type of trust you can set up for your family. As its name implies, a living trust will start to take effect while you are still alive.
Initially, you will be the trustee of that living trust. The successor trustee will only take over after you pass away.
What Are the Benefits of a Living Trust?
Why should you consider hiring an attorney? It may seem unnecessary since there are other ways for you to hand off your assets to your beneficiaries.
For instance, a will can help you facilitate that transfer too. Since trusts are more affordable to create compared to wills, you can argue that the latter would be the better option for your family.
That said, there are still real reasons why you may want to choose a living trust over a will. Detailed below are some of the main benefits that you can get from establishing a living trust.
Going through Probate Is No Longer Required
Passing through the probate process is a necessity if you are transferring assets to your beneficiaries via a will. It is a requirement in the state of New York.
The probate process is there to determine the validity of the will. You have no choice if you are using that mechanism to complete the transfer of your assets.
By keeping your assets in a living trust, you can completely bypass the probate process. Skipping the probate process also means that your assets can reach your beneficiaries faster. Instead of waiting months for the probate process to finish, they can transfer your assets to your beneficiaries as soon as your trustee can complete the transactions.
A Living Trust Can Help Maintain the Privacy of Your Estate
The probate process can be troublesome beyond the delay it may cause. Another issue you may face is a lack of privacy.
A will that goes through the probate process eventually becomes a public document. At that point, anyone interested in examining it will be free to do so.
You do not need to worry about that if you have left your assets in a living trust. The estate you have built will continue to remain private even after they transfer it to your beneficiaries.
You Can Amend a Living Trust
Your circumstances may change as you grow older. As you lose or accumulate assets, you may find that your living trust may no longer be to your liking. You may want to balance out your assets among your beneficiaries even further.
That is a key reason you should consider creating a living trust.
Consult with your lawyer and tell them that you want a provision added that allows for amendments. Do not overlook that, or you could run into some problems down the line.
How Do You Create a Living Trust?
Does the idea of creating a living trust appeal to you? If so, you need to familiarize yourself with the process of establishing it.
Follow the steps below if you wish to create a living trust for your loved ones.
Step #1: Choose between a Single or Shared Living Trust
To start, you need to decide what kind of living trust you want to create. Your options include a single trust or a shared trust.
Choosing a shared trust will make it easy for you and your spouse to transfer assets. A single trust is suitable for individuals who are not married or those who prefer to keep their assets separate.
Step #2: Select the Assets You Want to Place in Your Living Trust
Next, you need to determine which assets you want to place in your living trust. You can place all kinds of assets in your living trust, including your real estate properties.
Make sure you are okay with those assets in the trust. If you are thinking of selling certain assets, keep them out of the living trust.
Step #3: Name Your Beneficiaries
You can now name the beneficiaries of your living trust. Most people will choose their children, spouse, and other family members as their beneficiaries.
Step #4: Identify Your Trustee
According to Cornell Law School, your trustee must be someone who will act in good faith whenever they are making any transactions or investments. You must be certain that the person you name as your trustee will always keep the best interests of your loved ones in mind.
As long as you are still alive, you can serve as the trustee. Make sure there is a succession plan in place, so your living trust is safe.
Step #5: Create the Living Trust
At this point, you can now turn your attention to creating the living trust. Work with a living trusts attorney to ensure that you write the document properly. You should also consult with your spouse if you are crafting a shared trust.
Step #6: Sign Your Living Trust
The next step involves signing your living trust. You must sign it in front of a notary. Your spouse will also need to sign the document together with you if it is a shared trust.
Step #7: Transfer Assets to Your Living Trust
To finish, you will have to transfer your assets to your living trust. Seek the help of a living trusts attorney so you can complete the transfers quickly.
More on Trusts
Special/Supplemental Needs Trusts
The term “special needs trust” and “supplemental needs trust” are used interchangeably and are ostensibly the same legal document. A “special needs trust” or “supplemental needs trust” is a trust created for a person with “special needs” (physical or intellectual disability) that is designed to manage assets for that person’s benefit while not compromising that person’s access to important government benefits.
Beneficiary Designations
There may be reasons that a person does not want an asset to be transferred by a “last will and testament” or “living trust” at the time of their death. Generally, financial assets like bank accounts, investment accounts, life insurance policies, and pensions may be transferred by the owner of the account simply naming a “beneficiary” who is to receive the specific asset upon the death of the account owner.
This is a transfer that occurs at death “by operation of law” and completed by the account owner notifying the financial institution of the name(s) of the beneficiary(ies).
Inter Vivos Assets Transfers
An “inter vivos transfer” is a transfer of an asset made during a person’s lifetime. It can be contrasted with a “testamentary transfer”, which is a transfer made in a will or trust after a person’s death. There may be reasons that a person wants to transfer assets to another person during his/her lifetime.
However, careful attention must be given to the tax consequences and risk associated with each transfer. There are gifting techniques that can be utilized to reduce a person’s taxable estate while also minimizing risks, but consultation with a qualified attorney, accountant and financial advisor are critical before any such transfers are completed.
Advance Directives
An advance directive is a document that allows you to express your wishes regarding your health care and life sustaining treatment decisions while you are alive if you ever become incapacitated and unable to communicate. An “advance directive” helps loved ones, and medical personnel make important decisions during a crisis and is essential when creating an overall plan.
A health care proxy is an example of an “advance directive.” A “health care proxy” is a legal document that authorizes one or more persons to make medical treatment decisions on your behalf if you are ever incapacitated or unable to communicate while alive.
A living will is another example of an “advance directive.” A “health care proxy” is a legal document wherein you state your wishes regarding life-sustaining measures (feeding tube, do not resuscitate order) and authorize one or more persons to take action in accordance with your wishes if you are ever incapacitated or unable to communicate while alive.
Setting up your living trust can be a troublesome ordeal if you are not familiar with the process. Reach out to us at the Alber Law Group if you need help creating that document. We are always ready to help, so do not hesitate to contact us.
Living Trusts FAQs
A “living trust” is a contract created during a person’s lifetime between a person (often called the grantor, creator or settlor) and a person he/she trusts (called the trustee) for the purpose of managing assets during a person’s lifetime and providing for a distribution of assets upon such person’s decease. A properly drafted and funded living trust can often eliminate the requirement for a legal process known as “probate.”
A “testamentary trust” is a trust which is set forth in a person’s last will and testament and becomes effective after a person’s death only after the probate of the deceased’s last will and testament. The intended purpose is often to provide for a distribution of the deceased’s assets in a more controlled or tailored manner.
A “revocable” trust and an “irrevocable trust” are different in that the grantor of a “revocable” trust retains full power to revoke and modify the trust without any approval or consent, whereas the “irrevocable” trust is typically much more limited as to what can be modified or revoked. Both trusts, when properly drafted, executed and funded, can effectively avoid the legal process known as probate.
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