FAQ

No.  Joint tenancy does not avoid probate upon the death of the last owner. For instance, if you and your spouse own your house as joint tenants and you die the house passes to your spouse free of probate.  However, when your spouse dies, or if you and your spouse die simultaneously, the property will be subject to probate because there is no surviving joint tenant.  Had the house been placed in a Living Trust, there would be no probate at either death.

That is the one question only you can answer.  If you want to avoid the costs of probate and ensure that your assets do not become part of a public record, then you should carefully consider the advantages of a Living Trust.

Yes.  Assets placed within a Living Trust can be retained under the complete management and control of the owner of such assets until death or he or she is ready to turn over the control to another individual or Trust company.

It is really not a matter of how much you own.  Whether you are young or old, married or single, have a modest or substantial estate, just about everyone can benefit from a Trust. As a matter of fact, most small estates lose a greater percentage than larger estate through the probate process.

If you want to avoid probate, you must have a Living Trust, whether you are married or not.

Yes.

Not necessarily.  Depending on the size of your estate and your situation, you may require additional planning.

No. A Living Trust does not shield your assets from creditors.

If you do not have a Will, the state will make one for you.  Many times, the distribution of your assets may not be what you would have wished.  Furthermore, it will be a much more complex situation for your heirs.

The Living Trust has no impact on income taxes. You control your assets and continue to file your income and expenses on your tax return, including mortgage interest.

Not at all, because Social Security benefits are considered income, and the Living Trust has no effect on income.

Yes. You have exactly the same rights as you did prior to the creation of the Trust you can buy, sell, or transfer your assets at any time.

A Living Trust preserves more options. It can be distributed outright in its entirety at your death (like a Will), or the assets can remain “in Trust” since the Trust is a legal entity it “lives on” after a person’s death.

Many attorneys are not aware of the alternatives to probate offered by the Living Trust.   Some simply fail to mention this to their clients as it means that the attorney will lose probate fees. Remember that attorneys can receive from 3 to 10 percent of the gross estate for probating the Will.

There is no need to notify your attorney. When you execute your Trust, you revoke prior Wills.

lt is a unique Trust between married couples. Assets are divided into two Trusts, but administered together.   It is primarily created as a means of doubling the Estate Tax deduction.  It can also preserve half of the assets should there be a catastrophic illness or nursing home care.  It is also very useful when there is a second marriage involved and there are two sets of children.

An A/B Trust in a Will does reduce or eliminate estate taxes in the same way as a Living Trust. But, because it is part of a Will, it must go through probate.

It is possible to leave assets to an individual who has not yet been conceived. When you first draw up your Trust, you may have only one grandchild. However, as the years pass, you may eventually have many grandchildren. The language of the Trust provides for such a change.

Yes, the cost is tax deductible. Such a tax deduction comes under “Miscellaneous Expenses” and must exceed 2 percent of your gross income in order to have any effect.

There will be a nominal charge by your local courthouse to process the transaction.  All other assets can be transferred by phone or letter of transfer, no fee will probably be required. Overall, the cost of transferring your assets into the Trust will be minimal.

After we have prepared Trust Deeds for your out-of-state residence, vacation or rental real estate, you will transfer the assets yourself. We will provide any assistance that you might need to cover any conceivable situation that may arise.

Yes. Whether your assets are inside or outside the Trust, your ability to borrow against them has not been affected in any way.

On any new purchase, simply instruct your real estate agent, stockbroker, or bank or to record title to the asset in the name of your Trust.

Yes.  All of your assets should be recorded in the name of your Trust in order to avoid probate. On any new purchase, simply instruct your real estate agent, stockbroker, or bank officer to record title to the asset in the name of your Trust.

No. Your insurance policy will automatically follow the asset. Because you are the Trustee, your homeowner’s insurance need not be placed in the name of the Trust.

Personal Items such as jewelry and household items as well as automobiles of moderate value can be left out. Most everything should be included in the Trust property.

No, liquidation is not required. The assets should be distributed directly to the heir rather than selling the assets and distributing the resultant cash.

There are several ways to avoid such an outcome. If you distribute your assets to your child outright, the assets may well become commingled with the assets of their spouse. Several alternatives could be used to ensure that your estate assets would remain as your child’s assets.

First, you could leave all your assets in Trust with only the income going to your child. Assets themselves would then pass on to your grandchildren upon your child’s eventual death.

Second, you could distribute the assets to your child over a set period of time.

The third and most logical approach would be for your child to have his/her own Living Trust. Then upon receipt of your assets, they could be established as separate property in the child’s Trust.

No, there really are not, especially when compared to the many advantages a Living Trust provides. It does cost a little more than a Will and takes a little extra effort on your part to change titles and beneficiary designations. However, once it is done, it is easy to maintain, and your family will be very appreciative.

A Living Trust is controlled by the individual who creates the Trust for as long as that individual is capable or competent to do so. If a person becomes incompetent or incapable of handling his or her affairs, then provisions can be built into the Trust to shift control of the Trust to a successor Trustee that had been named in the Trust when it was executed.

The owner can set himself up as the Trustee and direct that all the funds of the Trust be used to provide for financial and medical needs of the Trustee. Without this protection there is always the possibility of guardianship proceedings or delays in using the owner’s assets for his own needs.

No. The property in the Will would have to be probated into the Trust, and the cost of probate is very expensive and time consuming. This testamentary process, called Probate, can be avoided for those assets placed in a Living Trust during the owner’s lifetime.

Yes. A Will, called a “pour over” Will, is always drafted in conjunction with your Trust. If you fail to transfer all your assets into the Trust, the Will picks up those assets at the time of your death and transfers them into your Trust for distribution. All assets “poured into” your Trust by the Will most go through the probate process first. Guardians for minor children are also named in the Will.

No. State law stipulates a special exemption for property placed into a Trust for the benefit of the Grantor.

No. As long as you are the Trustee of your Trust, any income generated by assets owned in your Living Trust are taxed as if they were still held in your name and reported on your personal 1040 form. No special taxpayer identification number and no special tax forms are required.

If the surviving spouse is a Trustee, he/she has unlimited rights to buy, sell and transfer assets.

Usually you name yourself to be the manager (Trustee). However, you could name a friend, a child who is not a minor, or a corporate entity, like a bank.

You can change or amend your Trust as often as you wish. We suggest, after two or three changes, you make an “amendment in entirety” (trust restatement) incorporating all of your changes into one document

A Living Trust is dissolved when all of the assets have been distributed or it may be revoked by the Grantor(s) at anytime.

No. A Living Trust does not insulate your assets from the legitimate claims of creditors.

No. The minimum age for a Successor Trustee is eighteen years.

A revocable Trust can be changed at any time until a designated event occurs, usually one’s death.  An irrevocable Trust cannot be changed once it has been created.

Yes.  All assets are simply acquired in the name of the Trust.

Congress has little chance of ever taking away the Living Trust. The Constitution of the United States of America grants certain rights to the States. One of these rights is right to create a legal entity such as a corporation or a Trust. Congress will probably not be able to invade this area of States’ rights.

The Living Trust has been around since 800 A.D. as Roman law. It was adopted by the English. The United States adopted the concept when this nation was formed.  English law is the basis for our legal system.