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Information to Bring to Estate Planning Meetings

Information to bring to estate planning meetings

In order to fully implement your living trust, assets will need to be transferred to your trust.  What you bring to the initial meeting depends on your individual portfolio, but we can review the individual statements from each asset you own to determine if it should be included.

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Information to Bring to Your Estate Planning Meeting

Wills v. Trust, What's the Difference?

Many people ask the difference between a Will and a Trust when considering estate planning. To begin, we should define each legal document before getting into the differences.

A Will names individuals or charitable organizations who will receive the assets owned by you in your name upon death. The person responsible for managing your estate through the Court process is named the Executor. A Will is also the legal document where guardians are nominated for minor children.

A trust is a legal entity that is created to hold your assets for your benefit during your lifetime and transferred to your beneficiaries upon death, without court involvement. The person responsible for managing the assets within the trust is called the “trustee”. A revocable trust can be changed at any time as long as you are competent to make the changes.

By definition these two legal documents serve different purposes, but practically some may consider them both a vehicle to transfer assets to loved ones or charities upon death. The major difference is that a Will requires court involvement for assets valued at $150,000 or greater and a trust is designed to avoid court involvement entirely. Involving the courts, known as “Probate”, is very costly and time consuming. At a minimum, the probate process can take 6-8 months, but the more complicated matters can easily take several years to finalize. If you have a gross value of assets over $150,000, a Will is a ticket to go to probate court.

Another disadvantage of administering a Will through probate is that the Will and value of the assets are public record within the Court’s files. Also, lawyer’s fees and executor’s commissions are based on a statutory fee schedule; a probate may cost more than the management and distribution of the same estate using a revocable trust. Accordingly, those that have assets with a gross value over $150,000 should consider a living trust to avoid the disadvantages of simply drafting a Will.

How do you determine the value of assets for the threshold of $150,000 for Probate?  Typically, we use the fair market value.  For example, let’s say you own a home with a mortgage of $300,000 but the home would sell for $350,000.  The Probate Court’s value this asset as a $350,000 asset even though there is only $50,000 equity. This is important since the fees are set based on the $350,000 value rather than the equity value.

Next, people may wonder why their estate plan has a Will and a trust? The reason is based on total protection of your estate rather than reality. I counsel my clients to focus and only use their living trusts, but their Will is provided as a back-up document only. The Will affects any assets that are titled in your name at death and are not titled within the trust. Another reason to have a Will in conjunction with a trust is for families with minor children. The Will is the legal document to nominate a guardian. However, assets held in a trust for minor children would be managed by the trustee of the trust, but the guardian would have legal rights to care for the child.

Estate Planning focuses on the orderly management and disposition of an individual’s valuable assets during lifetime as well as upon death or disability, with consideration of the impact of such wealth transfer on future generations. If you or your loved ones have any questions about estate planning, please call our office or contact us through our website to schedule an appointment.

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Estate Planning FAQ

What is Estate Planning?

Estate Planning focuses on the orderly management and disposition of an individual’s valuable assets during lifetime as well as upon death or disability, with consideration of the impact of such wealth transfer on future generations.


What is a Living Trust?

A Living Trust is a legal entity, which is created to hold assets for the benefit of another.  While you are alive, you manage your own estate in the same manner you currently do.  The significance of a revocable living trust is that it holds your property and survives you at death, therefore avoiding the court processes of probate.


What are the major advantages of a Living Trust?

A Living Trust provides for the disposition of your property as a Will does, but it also has the following advantages:  (1)  It provides for the immediate transfer of assets after death if you so desire or it allows you the control of deciding when your assets are transferred; (2) allows for a straightforward transition of management upon incapacity or death; (3) Avoids the expensive and time consuming process of probate; (4) Minimizes or eliminates estate taxes in some situations; (5) Provides security for you and your loved ones; (6) Offers flexibility.

Why is a Trust better than Probate?

A Will for estates over a threshold value must go through probate, which is expensive and time consuming.  The process of probate clears title to the assets for beneficiaries.  These are disadvantages:


a) Public Disclosure: Public notice is required.  Anyone can review any probate file in the Superior Court Clerk’s Office.  The nature and extent of assets and who gets them becomes public information.


b) Time delays: Delays in scheduling hearings occur when court calendars are choked or lawyers have time conflicts.  Public notice can also cause delays.  A six to eight month delay before assets are finally transferred is common.


c)  Expense: Courts conduct probate proceedings.  Lawyers gather, analyze, organize, and present data to the court.  The judge considers and decides whether to clear title to the assets.  Estate assets are drained by the various fees inherent in the probate process.


Important: With common Wills, two probate proceedings may be applied to the same estate assets:  the first when assets transfer from deceased to surviving spouse; and the second, from the surviving to children and/or other beneficiaries.


Under a Living Trust, the surviving spouse/trustees as beneficiaries are immediately afforded all proprietary rights to estate assets.


If I execute a trust, is a Will necessary?

Not necessarily, but we commonly provide a “Pour Over” Will which acts as a safety net to ensure inclusion of any omitted assets in the trust at the time of death.  Such terms, properly constructed along with the trust, may not entail probate.


What is a Pour-Over Will?

We would hope that all of our clients have properly funded trusts, but should an asset not be placed into the trust, the pour-over will is a document that instructs the executor of the will to pour over any assets into the living trust.  Think of the pour-over will as a housekeeping tool for your estate plan.


Does a Bank or Trust Company have to be involved?

No, the law does not require a corporate trustee.  However, a corporate trustee is permitted.


Are Living Trusts appropriate for single persons?

Yes, the advantages apply to estates of single as well as married persons.


Are all assets included in the trust?

Assets in the trust avoid probate and gain better tax treatment.  Some assets intrinsically avoid probate, but would be included if tax savings are gained.  The “Pour Over Will” effects blanket inclusion of omitted personal items of nominal value.

Important: Title for assets must be changed from you as individuals to you as trustees of the trust in order to implement the trust and secure its benefits.


Are Living Trusts appropriate to only larger estates?

No.  Savings are more dramatic on larger estates (the Probate Code allows fees in excess of $14,000 on a $300,000 estate), but probate costs and inconvenience do occur on smaller estates.


Should my trust be revocable or irrevocable?

That depends on whether your specific needs warrant that initial or subsequent trustees be empowered to change or cancel provisions.  Some circumstances warrant irrevocable terms.  Others may warrant the flexibility of revocable terms.


Does the Living Trust inhibit borrowing?

No.  Lenders examine trust documents along with your other financial data, but your rights to borrow, sell, or otherwise manage your assets are not restricted.


Does the Living Trust shield me from creditors?

No.  Your trust does not negate the rights of your creditors.


Will special tax returns be required?

Not as long as the creators of the trust receive all the income from the trust.


Why hasn’t my lawyer recommended a Living Trust?

Not all lawyers practice estate planning.  Also, transferring the estate of a married couple via two Wills and two probate proceedings generates far greater total fees.


How do I change my Trust?

In order to change the terms of the trust, a document is prepared called an amendment that is included with the original trust papers.  For example, an amendment would need to be made to change the distribution from one child to both of your children.  A trust can also be changed by a total restatement of the trust if multiple changes are involved.


What are the fees to change my trust?

We always charge a flat fee once we know exactly what you want changed, which we will advise you of before we begin making changes.


Will my trust need to be changed when I buy or sell assets?

No.  Buying and selling assets does not change the terms of the trust, but merely changes the assets in the trust.  However, in order to hold an asset in the trust, the title or name of the asset must be the name of your trust.  For example, once Jane Smith sells her home and purchases a new home, the title to the new home must be changed to “Jane Smith [trustees name], as trustee of the Smith Family Trust [Name of the Trust], dated October 10, 2000 [date of the trust].”


What is a Power of Attorney?

A power of attorney is a document authorizing someone else called the agent or attorney-in-fact to act on your behalf.  The purpose of giving someone this power is to enable them to act on your behalf by handling financial matters or medical decisions should you be unable to act for yourself.


What is a Living Will?
A living will, or sometimes called a physician’s directive, is a document in which you give directions to your physician for life sustaining treatment should you become unable to communicate your own wishes.


Why should I use your firm to develop my Living Trust?

There are many reasons why we are more cost effective:

  1. Expanded Coverage:  Our basic fee includes both “Pour Over Will” provisions, and “Living Will” provisions that specify your instructions regarding terminal medical care.  You are provided a complete hardcover manual with table of contents and title-tabbed sections for the various provisions.


  1. “Implementation” Service:  Our firm also provides the necessary documentation to transfer the assets into the trust and sends those documents to the necessary third parties. Other firms charge extra to implement the trust and other trust companies only provide instructions and requires you to implement your own trust
  2. Fixed Flat Rate:   At your initial consultation, you will be quoted a firm price prior to any final decision. This price will include consultations, drafting and implementation of your trust that is tailored to your specific goals.  Some trusts companies have seminars and group presentations on Saturdays at hotels.  These free seminars generally do not provide you with a trust that is individualized to meet your needs.
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