FAQ’s

Q:

What is a living trust?

A:

A revocable living trust is a written agreement designating someone to be responsible for managing your property in the event you become incapacitated. It’s called a living trust because it’s established while you’re alive. It is “revocable” because, as long as you’re mentally competent, you can change or dissolve the trust at any time at your own discretion for any reason. Typically, a living trust becomes irrevocable—and cannot be changed—when you die.

Q:

Why would I want a living trust if I have a will?

A:

A will must be validated by the probate court before it can be enforced. It will provide no protection if you become physically or mentally incapacitated which means the court can take control of your assets before you die. The revocable living trust avoids probate, and lets you keep control of your assets while you are living—even if you become incapacitated—and after you die. It can provide you with the peace of mind that comes from knowing that your assets and your heirs will be protected in the event that you unexpectedly become unable to handle your own financial affairs. You can decide if your assets should be passed on to your beneficiaries immediately upon your death, or portioned out over time and in amounts that you specify.

Q:

What is probate?

A:

Probate is the legal process through which the court sees that, when you die, your debts are paid and your assets are distributed according to your will. If you don’t have a valid will, your assets are distributed according to state law. Probate can be expensive, take time, and determine how long it will take and what information is made public

Q:

Does joint ownership avoid probate?

A:

Not always. Full ownership does transfer to the surviving owner without probate. But if that owner dies without adding a new joint owner, or if both owners die at the same time, the asset must be probated before it can go to the heirs. And, if you add a co-owner, you lose some control. There is always a possibility of your new co-owner being named in a lawsuit and of losing the asset to a creditor.

Q:

Do I lose control of the assets in my trust?

A:

As trustee of your trust, you can do anything you could do before—buy and sell assets, change or even cancel your trust. That’s why it’s called a revocable living trust. Nothing changes but the names on the titles.When you set up a living trust, you transfer assets from your name to the name of your trust, which you control—such as from “Bob and Sue Smith, husband and wife” to “Bob and Sue Smith, trustees under The Smith Trust.” Legally you no longer own anything; everything now belongs to your trust. So there is nothing for the courts to control when you die or become incapacitated. The concept is simple, but this is what keeps you and your family out of the courts.

Q:

Do I have to file a tax return for the
revocable living trust?

A:

No, you file the same tax returns and will continue to use your social security number.

Q:

How do I transfer assets into my trust?

A:

Asset with titles—such as real estate, stocks, CDs, bank accounts, investments, insurance, and others—need to be changed. Most living trusts also include jewelry, clothes, art, furniture, and other assets that do not have titles. Legacy Trust & Wills will walk you through this process.
You may also want to change beneficiary designations on insurance policies, etc., to prevent the courts from stepping in should the beneficiary become incapacitated or die before funds are dispersed.

Q:

How long will it take to create my estate plan?

A:

The staff at Legacy Trust & Wills is here to guide you through the necessary steps to help you move through the process. We generally find that the process takes three to five weeks.

Q:

Who are the trustees?

A:

Any mentally competent adult may be named trustee. If you’re married, you would probably name yourself and your spouse as co-trustees so that you maintain full control of the property while you’re alive. If you become too ill or disabled to manage your property, your co-trustee or successor trustee will do this for you.

Q:

Who can be successor trustees?

A:

People usually name a responsible adult family member. Sometimes this is an adult child or a brother or sister. You also retain the power to change your successor trustee at any time.

Q:

If something happens to me, who has control?

A:

For your trust, it will be the person/people you named in your trust as your co-trustee and/or your successor trustees.For your financial affairs, it will be the person you named to act as your Financial Power of Attorney.For your medical care, it will be spelled out in your Advance Directive (Living Will) and on the document where you assigned someone to b your Medical Power of Attorney.For your will, it will be the person you assigned to act as Executor.

Q:

Do these need to be different people?

A:

Your attorney will advise you as to who would be appropriate for each role when you meet, but often people will use only one or two family members to fill most of these roles.

Q:

Who determines that I am no longer competent to make my own decisions?

A:

Your doctor certifies in writing that you are no longer able to understand and appreciate generally the nature and consequences of your health care decision.

Q:

When does the trust end?

A:

If it is an individual trust, it becomes an irrevocable trust when the person dies. The trust terminates after all the property has been dispersed. This can be a relatively short time (six months) or could go on for years providing for minor children.

Q:

What should I bring with me to the initial meeting with the attorney?

A:

Before your meeting, our staff will guide you through a short list of questions which will help the attorney prepare. We find that most people have a generally good idea of what they own and who the people are in their lives that could act as agents upon death or disability. We encourage our client to leave their documents at home for the first meeting.