With proper estate planning, you can avoid Probate, save Estate Taxes and protect your family. This information is essential for your peace of mind, financial health, and for protecting the welfare of those you love.
What is a Living Trust? A Living Trust is a document that creates a legal entity. It is a "living" Trust because it remains "alive" after your death.
The Trust's purpose is to assure proper management of your affairs during and after your lifetime, even if you become incapacitated.
While you are living you have complete control over your assets - they belong to you as Trustee of your Trust.
A Trust does not pay any taxes or require you to file any extra income tax returns during your lifetime. You file and pay just as you do now, as though the trust did not exist.
A Trust gives you control over what happens to your home, bank accounts and personal property after your death.
A Trust allows you to specify who gets your assets and under what conditions and in what manner distributions are made.
Is a Will Good Enough? With a Will, your chosen agent distributes your estate according to your wishes. However, a Will alone will not avoid probate, will not reduce Estate Taxes, will not make funds immediately available and may result in financial hardship for your family.
Your Will is public information and may be viewed in the probate court by anyone after your death. Sadly, the Probate process is very slow, often nine months to two years or more.
What Happens If I Die Without a Will or a Trust? • The Court will Probate all but the smallest estates. This almost certainly includes anyone owning a home.
• The Probate Court Judge will appoint an executor to manage and distribute your estate (this person will likely be a complete stranger). Distribution will be made to legal heirs whether you want this or not.
• Court, legal, and administrative fees will be taken out of your estate.
• If you own a business, activities may be disrupted during Probate.
• Your family, even while mourning your death, will be burdened with red tape while clearing up your estate.
What Happens If I Die With a Trust? When you protect your assets and family with a Trust, your affairs are kept private and all your wishes are carried out as you instruct. There is no Probate, no Probate fees, no Court or Judge involved, and no surprises!
What is Probate? Probate is a court proceeding that results when a person with assets worth over $100,000 dies without a Living Trust.
The process is often slow, public and expensive. Your heirs will not have access to your assets until the judge says they can be released. A will alone does not avoid Probate.
Is Probate Expensive? Yes, it is generally many times more expensive than the cost of Trusts, Wills or other Estate Planning instruments.
And expensive as it is, the cost in dollars is probably less important than the cost of the emotional turmoil experienced by the family who is left to straighten out affairs that a Trust would have avoided altogether.
Costs include court filing fees, attorney's standard fees (and often, in addition, what the court calls attorney's "extraordinary fees"), and personal representative fees. It is not uncommon for fees on an estate to be as much as $10,000 or more.
For all of these reasons and more, it’s important to consult a financial professional who can safely navigate you through the legalities of life and death.
Financial Navigator Jim Lawless can help you protect your assets and provide for your loved ones, while giving you peace of mind.