Living Trusts vs. Wills - Part 5 (final)
December 17, 2007 | 1 Comment
It seems that a lot of you have enjoyed the series on living trusts vs. wills from viewing the amount of traffic that these posts have seen. I hope that all of my subscribers will enjoy the final post in this series. Soon I’ll have the entire list up on the resources page so that you can have everything in one place and be able to go there and download the full list in word format if you’d like.
I want to add that this list isn’t a conclusive list but just some things that you should keep in mind when doing your estate planning. As an estate planning lawyer I highly believe that living trusts are among the most efficient and best estate planning instruments available. However, they are right for everyone. When making important estate planning decisions that will effect your family for decades make sure to talk to your lawyer.
Okay, with that out of the way. Here is the conclusion to the list.
Living Trusts vs. Wills - Part 5 (final)
19. Is a living trust expensive?
Not when compared to all the costs of court interference at incapacity and death. How much you pay will depend on how complicated your plan is.
20. How long does it take to get a living trust?
It should only take a few weeks to prepare the legal documents after you make the basic decisions.
21. Should I have an attorney do my trust?
Yes, but you need the right attorney. A local attorney who has considerable experience in living trusts will be able to give you valuable guidance and peace of mind that your trust is prepared properly. In some states, qualified paralegals can now also prepare trust documents; however, they cannot give you legal advice.
22. If I have a living trust, do I still need a will?
Yes, you need a “pour-over” will that acts as a safety net if you forget to transfer an asset to your trust. When you die, the will “catches” the forgotten asset and sends it into your trust. The asset may have to go through probate first, but it can then be distributed as part of your living trust plan.
23. Is a “living will” the same as a living trust?
No. A living trust is for financial affairs. A living will is for medical affairs; it lets others know how you feel about life support in terminal situations.
24. Are living trusts new?
No, they’ve been used successfully for hundreds of years.
25. Who should have a living trust?
Age, marital status and wealth don’t really matter. If you own titled assets and want your loved ones (spouse, children or parents) to avoid court interference at your death or incapacity, consider a living trust. You may also want to encourage other family members to have one so you won’t have to deal with the courts at their incapacity or death.
26. Summary of Living Trust Benefits
- Avoids probate at death, including multiple probates if you own property in other states
- Prevents court control of assets at incapacity
- Brings all your assets together under one plan
- Provides maximum privacy
- Quicker distribution of assets to beneficiaries
- Assets can remain in trust until you want beneficiaries to inherit
- Can reduce or eliminate estate taxes
- Inexpensive, easy to set up and maintain
- Can be changed or cancelled at any time
- Difficult to contest
- Prevents court control of minors’ inheritances
- Can protect dependents with special needs
- Prevents unintentional disinheriting and other problems of joint ownership
- Professional management with corporate trustee
- Peace of mind
Living Trusts vs. Wills, Part 1
November 12, 2007 | Leave a Comment
Over the next few weeks I’m going to be blogging on the benefits of a Living Trust versus a Will. In my practice as an estate planning attorney in Mississippi and in my law firm in Tennessee I find that creating and using a living trust is often times the best avenue for protecting a family’s assets and making these as easy as possible for the family. This is true for all types of clients but especially true for clients with children.
Mississippi and Tennesse Estate Planning Series:
The Benefits of a Living Will
1. I already have a will. Why would I want to create a living trust?
Contrary to what you have probably always been told, a will may not be the best plan for you and your family - mainly because a will does not avoid probate when you die. For Tennessee residents A will must be verified by the Shelby County Probate Court, For Mississippi Residents a will must be verified by the DeSoto County Chancery Court before it can be enforced.
Also, because a will is only seen and triggers actions after you die, it provides no protection if you become physically or mentally incapacitated. So the court could easily take control of your assets, without your input of what to do, before you die - a concern for millions of older Americans and their families.
Fortunately, there is an extremely simple and proven alternative to a will–the Revocable Living Trust. It avoids the process of probate, and lets you keep complete control of your assets while you are living - even if you become incapacitated - and after you die.
2. What is probate?
Probate is the legal process through which the court fees 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 Tennessee or Mississippi law of intestacy. For a more detailed look at what probate is look at the probate section of the Resources and FAQ page.
3. What’s so bad about probate?
It can be expensive. Legal and executor fees and other costs must be paid before your assets can be fully distributed to your heirs. If you own property in other states, your family could face multiple probates, each one according to the laws in that state. Because these costs can vary widely, be sure to get an estimate.
It takes time, usually anywhere from nine months to two years, but in many instances it can take much longer. During part of this time, assets are usually frozen so an accurate inventory can be taken. Nothing can be distributed or sold without court and/or executor approval. If your family needs money to live on, they must go to the Chancery Court or Probate Court to formally request a living allowance, which may be denied.
Your family has no privacy. Probate is a public process, so any “interested party” can see what you owned and who you owed. The process “invites” disgruntled heirs to contest your will and can expose your family to unscrupulous solicitors.
My next post will look more in depth into the probate of the will. This will lead into a look at how a living trust can be beneficial to people looking to avoid the high cost and long length of time associated with the probate process.
If you would like to gather more information about Living Trusts in Tennessee or Mississippi please call the Ferrell Law Firm at 901-881-6352 today!
Celebrity Estate Planning Blowups
November 12, 2007 | 2 Comments
I received the following article courtesy of WealthCounsel. I’m including it here for all of my Tennessee and Mississippi Estate Planning clients who might find it interesting.
The Worst Estates of the Year
Life is short-sometimes tragically so-and an estate plan is never truly
finished. The year’s most notable estate blowups were all sadly avoidable, if
only they had left clear intentions for everyone on their list.
Anna Nicole Smith
A $500 million baby . . . maybe
Only 39 when she died in February of an accidental overdose, Anna Nicole
Smith had not updated her 2001 will that named her son, Daniel, who had died of
an accidental overdose several months earlier, as sole heir. Probate court
will most certainly award her modest assets of roughly $700,000 to her only
surviving child, daughter Dannielynn. As for her share of billionaire
ex-husband J. Howard Marshall II’s estate, the court will likely name her daughter
the rightful heir of close to $500 million.
But where that money ends up will depend on the man who controls it-either
Dannielynn’s biological father, Larry Birkhead, or her mother’s lawyer and
companion, Howard K. Stern, who is named as executor and is likely to be a
trustee. Dannielynn’s financial future would have been safer if her mother’s
will had spelled out full provisions for a trust, says James Ferrell, a
trusts-and-estates attorney in Memphis, Tennessee. Ferrell has handled many estate
disputes involving people who have omitted certain children from their
wills, but the Smith case is virtually unprecedented. In most states, if a
wealth holder wishes to prevent a biological child from inheriting assets, it
must be stated in the will. Otherwise laws of intestacy will assume the child
was omitted unintentionally.
