Tragedy can strike at any time and no family is immune. We have worked most of our lives preparing for retirement and in the process have created an estate (mine, be it modest) that can be vulnerable if you die or become disabled (incapacitated).
Do you know what will happen to your family assets when you die or become disabled? How your family can be torn apart because of resentments surrounding your estate? Who will decide how your assets are divided between your survivors and creditors? What will happen if you do not have an Estate Plan or what is an “Estate Plan” and what can it do for you? These all are important questions and you may have many more.
My first recommendation is to find a reputable Estate Planning and Probate attorney that can answer your questions. Most reputable attorneys will have a free consultation and can provide education, recommendations and references if requested. It is important that you trust your attorney so don’t be afraid to ask, they will not be offended. You may be able to find the information on the attorney’s website and by doing a search for complaints on the internet.
My second recommendation is to understand that you are never too young to take control of your assets; the rules on probate apply to everyone regardless of age.
The Difference between a Living Will and Living Trust
First of all, it should be understood that a living trust is not the same as living will. These are two different instruments and should not be confused with one another. A living trust is a legal document that ensures that a person’s property is dispersed according to his or her wishes upon death. It can also be used to include issues concerning disabled adults, minor children, and who the deceased wishes to have as guardian for those children.
A living will, on the other hand, is a legal instrument that carefully details the types of medical treatment a person wishes to receive, or not receive, should that person become incapacitated through illness or injury. Today, living wills are incorporated within Advance Health Care Directives.
When you work with a living trust, you actually transfer ownership of your assets to the trust. You then appoint someone to act as the trustee and that person will administer the trust when you are no longer able to do so. The trustee may be a family member, attorney, friend, or even a business establishment such as a law firm.
By having a living trust, you can save your family and others some problems that might pop up later on after your death. The main issue that it can deal with is probate. A living trust does not have to go through probate court because your assets are technically no longer yours; they are owned by the trust. Only those items that are still in your name will be subject to probate. In order to keep your family from having to go through probate, however, you must make sure that all property has actually been transferred out of your name and into the trust. If you fail to do this, property may still go through probate.
If you are considering the use of a living trust, be very careful with whom you work with. There are companies out there who will happily take your money in exchange for what they call “do it yourself” kits that are all but worthless later on when they are needed. The best way to make a living trust is to do it through a reputable attorney. In fact, some states will not allow validity of any living trust that is not handled through a law professional.
You should also be aware of the fact that a poorly written living trust can actually cost your loved ones more money than they might be able to spend. It is very important that you take the time to have your living trust set up properly and that you transfer your assets into the trust as required. No one likes to think about their own demise, but no one wants to saddle those left behind with burdens either. This can be especially important if you have minor children who will need a guardian in case you are not around to take care of them.
Keep in mind that the laws governing probate can change from state to state.