Often times I am asked: “I found a template online for my Will; do you think that would be sufficient?”
Although online resources can give you some basic background on what a Will or Trust is, most of the templates found online do not provide you with the necessary information. Legal instruments that are personal in nature and dictate the future of your assets, your property, and your children, should not be generated from an online survey. In fact, online generated forms require you to agree and understand the form may not fit your purpose.
"...but why establish a Trust or why draft a Will?"
A will is a perfect tool for the distribution of your assets to your beneficiaries upon your death. A living trust, on the other hand, takes effect upon formation and is an excellent way to manage assets, large or small, during your life and beyond. Unlike a Will which is of public record and subject to the probate court, a trust remains private throughout its existence, is not subject to probate court upon death, and is protected against creditors.
Whether you’re married, a young parent, or even single - If you own assets of $25,000.00 or more, you should consider protecting these assets.
I encourage you to notify any of your family or friends who also need to get their affairs in order; specifically those who have minor children, own their own home, cares for aging parents or those approaching retirement age themselves. Contact us to set up your first FREE consultation… www.leanalaw.com.
In the meantime, I would encourage you to review the below scenarios depending on what category you fall under:
1. Are you a newlywed? - If you're married and the combined estates of you and your spouse exceed $1,000,000 or your state's exemption from estate taxes, then you and your spouse will need to establish Living Trusts to take advantage of both of your exemptions from estate taxes. Note that while this type of tax planning can be done in a will, once you and your spouse divide your assets into separate names, the assets will need to be probated after each spouse dies. The use of Living Trusts insures that probate can be avoided.
2. Are you a young parent? - Life insurance policy or retirement plans can become a problem if the parents later divorce or if one parent dies and the children are still minors. What will happen to the life insurance or retirement account? These funds will be placed in a court-supervised guardianship or conservatorship for the benefit of the minor until age 18 or 21. Thus, in these situations, I recommend that the parents establish a Living Trust to be the primary or contingent beneficiary of the life insurance or retirement account. That way the successor Trustee will have the legal authority to accept the funds instead of a court-supervised guardian.
3. Are you Single? - Anyone who is single and has assets titled in their sole name should consider a Living Trust. The two main reasons are to keep you and your assets out of a court-supervised guardianship and to allow your beneficiaries to avoid the costs and hassles of probate. The minimum net worth necessary for a single person to consider using a Living Trust will.
4. Own any real estate? - If you own real estate in more than one state or outside of your home state, then you'll need to establish a Revocable Living Trust and deed the out of state property into the trust. Otherwise, your family may be faced with two separate probate estates - one in the state where you live, called the primary probate estate, and a second in the state where the real estate is located, called the ancillary probate estate.
