||You've probably seen commercials and advertisements touting
the benefits of Living Trusts. If your estate will be less than $100,000, then a Living
Trust is probably not necessary because your estate will likely avoid Probate anyway. But
if you own real estate, or other assets worth more than $100,000 in total, then a Living
Trust is necessary for your heirs to avoid the six-month to two-year wait, the publicity,
and the thousands of dollars expended in Probate.
A trust is a written document under
which money or other assets are transferred from one person (the "grantor") to
another person or institution such as a bank (the "trustee"), to be managed and
used for the benefit of a third person (the "beneficiary"). Trusts can be
designed to accomplish a wide range of financial and estate planning goals. There are two
basic types of trusts: the "living trust" and the "testamentary
Living trusts, also known as "inter vivos" trusts, are created during the
lifetime of the grantor. Testamentary trusts are drafted as part of a will and take
effect after the death of the grantor. By naming a trust as beneficiary of your life
insurance policy, you can exercise greater control over the distribution and management of
the proceeds than by designating an individual beneficiary. For example, instead of naming
your 5-year-old son as policy beneficiary, which could permit him to access the funds at
18, you could have a trust drawn up with your sister as trustee which directs her to make
distributions to your son at ages 25, 30, and 35. Trusts can help ensure equitable
treatment of children with different financial needs (one child may have health problems
or need special schooling), and can provide financial security for an ill spouse unable to
manage his or her investments.
A Living Trust is completely revocable ... meaning you can change your mind at any time.
Its function is to hold title to your property while you are the Trustee and in
complete control, and to distribute the property at your death according to your wishes.
It really takes the place of a Will - although we will be preparing a
"pour-over" Will to go along with your Living Trust in order to make sure
everything ends up in the Trust.
A Living Trust for you alone costs $495 ... for you
and your spouse together - $750. These prices include
the Living Trust, Pour-Over Will(s), Advance Health Care Directive(s) and a QuitClaim Deed
to transfer your real estate to your Trust.