Should I Have A Living Trust?
There are times in our lives when we need to think about what will happen to our homes or assets after we are gone. It is very important to prepare for the transfer of those assets to our loved ones, when we are gone. This is not always the best subject to discuss, but it is a subject that needs to be addressed if we do not want the Federal or the State government to be involved with our hard earned assets. The transfer of our home and other assets to our heirs can be done the way we want it to be done, if we fund a trust we create.
I have included some information from Amanda Drukker, a very capable and knowledgeable attorney, who spacializes in estates and trusts. I think Amanda can explain more clearly than I could on how to take the steps to prepare and fund a trust so here we go.
“Do any of these apply to you:
I own a home or am thinking of buying a home in the next year or so.
I want to avoid probate.
I am interested in creating a legal mechanism to manage my property for my children or other loved ones until I am comfortable with them making their own financial decisions.
I am interested in creating a legal mechanism to manage my property for my benefit in the event that I become incapacitated.
I want administration and settlement of my estate to be a private process.
If you answered yes to any of the above, a living trust might be right for you.
Own or buying a home. If you own a home at the time of your passing, your estate will have to go through probate unless you transferred the home into a trust during your lifetime. Probate is a public, court-supervised process for transferring assets from a deceased person’s estate to the beneficiaries named in a will, if there is one, or to the heirs-at-law, if there is no will.
Avoiding probate. Probate is required when a deceased person’s estate has more than $50,000 in real property. The probate process can be time-consuming (taking up to a year or more to complete) and expensive. State law establishes fees to pay your estate’s executor or a court-appointed representative based on the value of the estate. As a small example, if you have an estate of $200,000, the statutory fees for your executor/representative would be $7,000. If your executor/representative also engages an attorney to assist in the probate process, the statutory fees could easily double.
Managing property for young loved ones. If you have children or other young loved ones, you can set up a living trust to manage your property for their benefit in the event of your passing. The trust document can enable your trustee to use your property for your children’s or other loved one’s support, until they are of an age you specify in the trust document that they can receive your property outright.
Managing property if you become incapacitated. If you are concerned about who manages your property if you become incapacitated, holding your property in a living trust may provide you with peace of mind in this regard. Your trust document, together with a durable power of attorney for financial matters, can specify your wishes with respect to the people who will manage your property and make financial decisions for your benefit should you become unable to do so on your own.
Maintaining privacy. If you want the administration and settlement of your estate to be a private process, a living trust can provide for that. As noted above, probate is a public, court-supervised process. Administration of a living trust is a private matter, absent someone petitioning the court for involvement.”