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Wills & Trusts

We have already explained the documents that are used to plan for incapacity. While some of the documents on this page can also be used to plan for incapacity, all of these documents direct where your property should go upon your death.

Documents that Plan for the Transfer of Your Property

Last Will and Testament

This is the basic legal document that provides directions on how you want your property, or estate, distributed at your death.

  • The person that you choose to follow your directions is called your Personal Representative.

  • Before your Personal Representative can follow the directions in your Will, he or she must first open a probate with the court and be formally appointed by the court.

  • Probate is the court process of identifying all of your assets, paying your final bills, and distributing the balance of your estate as you have directed.

  • Probate is a formal process that can take time, but one benefit is certainty.

  • Court oversight provides the certainty that your beneficiaries receive good title to the property you leave them without having to worry about future creditor claims.

Revocable Living Trust

A Trust is a legal document that sets forth the rules you want to be followed for the property held in Trust for your beneficiaries.

  • A Revocable Living Trust is a Trust that you can revoke or amend whenever you want and that is created while you are alive.

  • The technical term you may have heard for these Trusts is “Inter-Vivos,” which means “among the living.”

  • Every Trust has a Grantor, a Trustee, and at least one Beneficiary.  The Grantor is the person creating the Trust and funding it with their property, the Trustee is the person who manages the property, and the Beneficiary is the person who enjoys the benefit of the property.

  • Most Grantors of Revocable Living Trusts also act as Trustee during their life and continued capacity.

  • Most Grantors also name themselves as the Beneficiary during their life with remainder beneficiaries who will receive the property following the death of the Grantor; at least one beneficiary other than the Grantor must be named.

  • A Trust can avoid probate because the property transferred to the Trust is legally owned by the Trust and therefore does not need to be probated at the death of the Grantor.

  • A Trust can also avoid the need for a guardianship if the Grantor becomes incapacitated because the person named as Successor Trustee will begin managing the Trust property for the benefit of the Grantor who will still be the Beneficiary.

Irrevocable Living Trust
  • An Irrevocable Trust cannot be revoked or amended after you create it, and the property you transfer to the Trust cannot be returned to you.

  • Property that you place in an Irrevocable Trust is no longer considered part of your estate, which means that the property is typically not added to the value of your estate when determining if you owe Estate Tax.

  • Irrevocable Trusts are often used to own life insurance that insures the life of the Grantor.

  • Irrevocable Trust can be used in a number of other ways to plan for Estate Tax

  • Irrevocable Trusts can also be established for beneficiaries who need to protect eligibility for programs like Medicaid and Supplemental Security Income (SSI).

  • Couples who have assets or adult children from previous marriages can use the irrevocability feature of these Trusts to create a plan that will protect the original estate planning goals for their respective families.

Testamentary Trusts

A Testamentary Trust is a trust created through a Last Will and Testament.  This means that the trust does not come into existence until the Last Will and Testament that creates the Trust is probated.

  • These Trusts cannot be used to plan for incapacity because they do not exist during the Grantor’s lifetime.

  • Testamentary Trusts complement a Last Will and Testament because they allow for conditions to be attached to the transfer of property instead of leaving it to beneficiaries outright.

  • Testamentary Trusts can contain special needs provisions for any beneficiaries who receive financially tested public benefits such as Supplemental Security Income and Medicaid.

 

Everyone benefits from estate planning because everyone benefits by maintaining as much control over their lives and property as possible.  Even the simplest estate plan can provide more control, reduce costs, avoid the court system, and bring peace of mind to you and your family.

Call now to put the attorneys at Staunton & Faglie, PL to work on your estate plan.