FREQUENTLY ASKED QUESTIONS
What should I bring to my appointment?
Q: I am interested in Living Trust Planning, what should I bring to the appointment?
A: Click below for a downloadable checklist of items you can bring to your appointment for Trust planning.
Q: I am interested in Will Planning, what should I bring to the appointment?
A: Click below for a downloadable checklist of items you can bring to your appointment for Will planning.
Q: Generally, who is the trustee of a Living Trust?
A: While the trustor is alive, he or she typically acts as trustee. For married couples, either one or both spouses may act as trustee or co-trustees. The successor trustee is an individual that is designated to be in charge of the trust in the event of disability or upon death.
Q: What is the annual fee for a trust?
A: Generally, there is no annual fee associated with maintaining a trust. Fees are involved when an amendment to the trust is made which involves changing the terms of the trust. When a spouse, or Trustee, passes away fees will be charged in order to handle the Trust Administration to take advantage of certain tax benefits, if applicable, and to follow the terms of the trust.
Q: Does a Revocable Living Trust provide asset protection?
A: During the lifetime of both spouses there is no asset protection provided by a revocable living trust. However, if properly drafted, there can be protection for the survivor after the first spouse dies. The trust can also be created to provide creditor protection for other beneficiaries of the trust after the death of one or both spouses.
Q: What is a Guardianship or conservatorship?
A: This is a court-supervised proceeding which names an individual or entity to manage the personal affairs of an incapacitated person. A guardianship may also include the duty to care for the incapacitated person. A guardianship can also be a proceeding which names the person or persons to provide care and manage the personal affairs of a minor.
Q: What will happen to property if an individual dies without a will or trust?
A: If an individual dies without a will or trust, state law determines who will be the ultimate heirs. This distribution plan can be found in the intestacy statues of each state. The applicable state can be either the location of legal residence (personal property), or the state in which the assets are located (real property).
Q: What if a joint tenancy is created between parent and child?
A: This is a disadvantageous way to plan an estate. The problem with putting a child’s name on title to the parent’s property as a joint tenant is that while it will avoid probate, creditors of the child will be able to reach the joint tenancy property. It may also create a taxable gift when none is expected, and may not be consistent with the ultimate desired distribution.
Q: What is probate?
A: Probate is the court procedure used to change title to assets from the name of an individual who has passed away into the name of the living beneficiaries. It is also where all creditors of a decedent file claims to collect their debts and where interested parties who have a complaint regarding the deceased can file their complaint (a will contest). Even without a contest, probate can be costly and time-consuming. Probate is a public proceeding.
Q: Can probate be avoided?
A: Probate can be avoided with careful planning. There are a number of different techniques for doing so which can be used alone or in combination.
Q: Do property taxes change if a Trust is created?
A: Generally, property taxes remain the same when real estate is transferred into a Revocable Trust, although laws vary from state to state and county to county. A transfer to an Irrevocable Trust can result in a change in property taxes.
Q: Can someone contest a trust like breaking or contesting a will?
A: Anyone can hire an attorney to question how legal affairs have been arranged. So, in theory, anyone can attempt to contest a trust. In practice, however, it is more difficult than contesting a will. As all wills must be probated, any interested party can easily join the routine probate court proceedings and contest the will at that time. In contrast, someone who wants to contest a trust must take the initiative to begin his or her own lawsuit, complete with court and attorney’s fees.
Q: Who is the trustee of the Living Trust?
A: While the trustor is alive, he or she usually acts as trustee. For married couples, either one or both spouses may act as trustee or co-trustees. The successor trustee is an individual that is designated to be in charge of the trust in the event of disability or upon death.
Q: What is the trust name?
A: The trust name will be [trustee’s name] as trustee of the [trustor’s last name] living trust dated [date], and any amendments thereto. An example would be Bill and Mary Smith as co-trustees of the Smith Living Trust dated January 1, 2017, and any amendments thereto.
Q: Why is a Pour Over Will necessary if a Living Trust is created?
A: A Pour Over Will is used first to name a guardian for minor children. Second, it protects against intestacy in the event any assets have not been transferred into the trust at the death of the Settlor/Owner. Its function is to pour any assets left out of the trust into it so they are ultimately distributed according to the terms of the trust.
Q: How is a trust revoked?
A: Trusts are rarely revoked. Most of the time, once a trust is set up, no one wants to revoke it. However, there are situations where it does occur, primarily in the case of divorce. A brief written agreement is prepared, indicating that the trust is now revoked. The assets are removed and put in the name of the individuals, who are free to establish new trusts if they so desire.
Q: If real estate is transferred to a trust can the bank call the loan?
A: Enacted as part of the Garn-St. German Depository Institutions Act of 1982 (P.L. 97-320; 96 Stat 1501) a due-on-sale clause cannot be enforced on a transfer into an intervivos trust on which the borrower is and remains a beneficiary and which does not relate to a transfer of rights of occupancy in the property. This exemption applies to residential real property containing less than five dwelling units. [12 USC Sec. 1701j-3(d)] The regulations list that the borrower in this type of situation must remain the beneficiary and occupant of the property. [12 CFR 591.5(b)(vi)] However, occupancy is not defined.
Q: Will an individual still have control over their property if he or she establishes a Living Trust?
A: Absolutely! While the individual is alive and mentally competent, he or she has complete control over the property. He or she can buy, sell, improve, spend, change investments, or give away property just as he or she would without a trust. The trust can be modified in any manner desired or it can be completely revoked.
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