Do you have a living trust plan? This article explores what it is and why you need one.
If you are like millions of people in America, you have put it off year after year. “I know I need to do it, but I just don’t have time right now. I’ll do it later.” But later doesn’t come until it’s too late. If you, your spouse . . . or even both of you die suddenly, your family is left to pick up the pieces. What a mess you’ve left for them!
Do you have it all together?
You know what I’m talking about, don’t you? Do you have a will? A durable power of attorney? What about a health care power of attorney? Do your children know where they are stored? Do they know your final wishes?
These are all tough questions, but ones you should consider. Last year, my husband and I decided to stop procrastinating and do something about our wills. Oh, we had one – a handwritten piece of paper, witnessed by a couple of friends back in the early 80’s. It was no longer valid because
- My mother was listed as the one to take care of our children in case we died
- Our children are grown and have children of their own.
Besides, my mother has Alzheimer’s now and is in Assisted Living.
Wow! Time sure has passed quickly for us but, as I’m sure you will agree, it doesn’t stop. You need to do something about your planning – NOW – while you still can.
One Thing Led to Another . . .
Once we finally started discussing our will, we realized this just might be bigger than we originally thought. Sure, when we were first starting out and only had one child, maybe the handwritten, witnessed will was sufficient. (But, probably not!) Over the last forty years, though, we have accumulated “stuff.” Not only do we have our home in Kansas City, but we have a lake home in Arkansas . . . ummm another state. We started talking about how to divide up our assets among the three children once we are both gone. One thing led to another until we found ourselves sitting down with an attorney. Not THAT kind of attorney – he was a Trust attorney. And boy, was that ever the right thing for us to do!!!
If you have any assets of note, a blended family (children from different marriages), a business . . . you get the picture . . . you should definitely consider a Trust attorney. He takes all the guesswork out, completes all the paperwork for you and makes sure everything is legal. Ours was awesome! He helped minimize the tax implications for our children and even made some suggestions to help with our tax liability as well.
For so many years we hesitated on spending the money to work with an attorney and for so many years we felt totally unprepared as a result. Now I have this feeling of peace. We are prepared for whatever comes our way. We are responsible adults. 🙂
Do YOU Need a Trust Attorney?
We hired a trust attorney. He helped us set up a living trust.
A living trust is a legal document that states who you want to manage and distribute your property if you’re unable to do so, and who receives it when you pass away. Once it is signed, you transfer ownership of your assets into the trust and you remain in complete control of your property. The living trust property can be managed and distributed without going through the probate court. You can read more at: https://www.legalzoom.com/personal/estate-planning/living-trust-overview.html
There is definitely a cost associated when you hire an attorney, but we felt comfortable with ours – that he could take care of everything and we wouldn’t have to worry that anything was incorrect. For us, the cost was worth the peace of mind.
Could you do it yourself and save money? Maybe. In fact, if your situation is VERY simple – perhaps you have one heir and everything goes to them – you may not even need a trust. But if your situation is more complicated and you mess this up . . . well, let’s just say your children / heirs will NOT be happy when they have to get everything straightened out after you’re gone. And if it ends up costing them extra money, you won’t be the “best mom/dad/grandma/grandpa in the whole world.” Just sayin’.
If you have a unique situation, need a special needs trust, or are overwhelmed by a complex or large estate, hiring a living trust lawyer can definitely help you sort out any questions or handle creating a complicated living trust. Before you jump to hiring a lawyer, however, do some research and educate yourself about trust basics.
Living Trust Basics
It is helpful to know what goes into a living trust. A living trust document usually starts with a very basic template and includes the following information:
- The creator of the trust (your name if it’s your trust)
- The trustee, the person in charge of managing the trust – this is your name if it’s your trust
- The trustee who will take over managing the trust and distributing the property when the original trustee dies or becomes incapacitated. This is usually a spouse, close friend, or adult child/children.
- The beneficiaries – the people who will get the property of the trust (the same as in a will).
- The trustees who will manage any property left to young beneficiaries. Often times, when children or young adults inherit property from a trust, someone is named trustee to manage the property for them until they are of a mature and competent age to manage it themselves.
After you sign your trust in front of a notary and transfer something into the trustee’s name, under the trust’s terms your trust is funded and legal.
How Does a Living Trust Work?
You will transfer all your assets into the Living Trust: homes, cars, boats, RVs, your airplane, business interests, your 401(k)’s, IRA’s, bank accounts, life insurance . . . basically everything you own. As long as you and your spouse are both alive and capable, you control all the assets. If one of you dies or becomes incapacitated, the other becomes the controlling person of the trust. Not until both you and your spouse are no longer alive or capable, do your children / heirs begin to control the trust. That’s what makes it a “living trust” – as long as you are living (and able) – you control the trust.
When you and your spouse are gone, your children will meet with the trust attorney and he will help them through the next steps – changing the names on the trust, guiding them in tax decisions, etc.
What Else Goes into the Living Trust?
Besides all your assets, you should also have the following four documents created and included in your trust:
- Your will
- Advanced directives and living will
- Power of Attorney
- Healthcare Power of Attorney
See my article on Four Must-Have Documents for more information on each of these.
Advantages of a Living Trust
There are several advantages of setting up a living trust.
- It’s a smart way to avoid probate.
- Your personal and financial matters remain private.
- Your affairs get handled if you are incapacitated.
- Allows you to do whatever you want with your money – buy and sell assets, open bank accounts and make investments just like you do now.
- You can amend or change the trust any time, or even revoke it and pull your assets out.
- It remains on the shelf, ready to act if something happens to you or your spouse.
Bottom Line with a Living Trust: You want to make sure your property goes to the right people, at the right time and at the least cost. A living trust can do all this. It helps you manage and distribute your property efficiently without court interference. Read more at Legal Zoom.
Next Steps
Wherever you live, you should find a knowledgeable trust attorney to help you set up a living trust.
By the way, if you live in the Kansas City area, you should call our attorney, Corey Rasmussen, and set up an appointment. He’s very knowledgeable and able to work in Kansas and Missouri. His specialties are wills, trusts, probate and business law. (And no, I don’t get paid to tell you this – I just believe in him so strongly.)
Corey’s contact information:
- Phone: 913-871-2188
- Email: corey@rasmussenlawkc.com
- Website: http://www.rasmussenlawkc.com
If you found this article helpful, please share it with your friends on Social Media. Also, you can sign up in the form below to be added to my email list. I will send out an email when new articles are published. I promise not to bug you all the time with email flooding your mailbox.
Also, leave me a comment to let me know if you contact Corey and your experience with his group.
Join the newsletter today!
Subscribe to get our latest content by email.