1. A living trust brings all of your assets together under one single estate plan with ONE set of instructions.
This arrangement makes your wishes easier to carry out. Trusts are designed to facilitate the distribution of your estate in that it will be simplified, unambiguous, and clear-cut. Provisions made to ensure the correct titling of your assets/beneficiary designations from your retirement savings plans and life insurance policies are given the highest priority. This preemptive action guards against legal contests and family squabbles that can easily erupt due to poor estate planning.
2. A clearly written and legally correct living trust is a private matter which is not obligated to be a part of the public record, plus they are not easily prone to litigation (as wills frequently are). Probate is a court supervised set of procedures that are mandated by law to be carried out in public.
Disappointed or disinherited heirs are free to retain counsel to contest the validity of your will, and to call into question your state of mind when you signed/executed it. In addition, opportunists with varying motivations and self-interests can gain easy access to your family’s personal and financial information. This results in unnecessary expenses, animosity, and delays in settling your estate. Having a trust in place bypasses this very real possibility entirely.
3. A trust can help you avoid court interference should you become incapacitated.
Any reasonable person would much rather have their long-term care and assets managed privately by those they know and trust. Without having appointed a trustee/attorney beforehand, the probate court must become involved and appoint a conservator to conduct your financial affairs. Assuredly, legal fees/costs and the potential embarrassment to your family will result from this type of proceeding. Just like with contesting the credence of a will, this legal process will be available for all eyes to see.
4. Just as trusts avoid probate, real property owned in other states must be probated if you only have a will.
If you own real estate in other parts of the country, then your surviving family members will need to pay for locally licensed legal counsel to prove their claims of successor ownership for each property held by your estate. A will must be verified and enforced by the court in order to settle your bequests, so your heirs need to be prepared to pay significantly to advocate and protect their interests.
WHY “DO IT YOURSELF/FILL IN THE BLANK” WILLS & TRUSTS OFTEN RESULT IN DISASTER
Retaining the services and expertise of an attorney who can assist you in preparing a smart estate plan requires a serious investment of time and money. The benefits (however) far outweigh whatever the upfront costs may be. Having the assurance and peace of mind that you and your family will be legally and financially protected in taking on the challenges of the future is inestimable. However, these guarantees vanish immediately when one chooses to forgo retaining experienced legal advice and opting for the “do-it-yourself” approach to estate planning. Many unpleasant scenarios and real potential dangers await those who want to save a few dollars in the short-term; and whose loved ones will probably end up having to pay tens of thousands of dollars correcting their mistakes.
Everyone is unique. No two families are the same. The slick advertising that online legal services utilize (especially with using formercelebrity attorneys to pitch their offerings) cannot deny this simple fact: virtual legal document preparers that promise cheap, fill in the blank options for estate planning will never replace the professional, confidential relationship between a lawyer and his/her client. When circumstances require urgent technical advice and counsel, these do-it-yourself websites are of no use to a distraught client. Their staff is prohibited from rendering any kind of practical legal guidance to consumers. If you are making a terrible mistake in your estate planning, they can’t prevent you from doing so (the
unauthorized practice of law is a criminal offense in all 50 states).
In addition, these online services only offer all-purpose-type estate planning documents. They often lack the legal language and state specific legislation crucial to making absolutely sure that your wishes and intentions will be carried out. Those who choose to this method cannot protect their children/heirs from potential lawsuits, former spouses, creditors, or from being disqualified from receiving guaranteed government benefits (if they have special needs). Only an attorney who is experienced in this area of the law can provide you with expert opinions and suggestions to help you make your estate plan a successful one. A strident example of this is in attaching a Preliminary Change of Ownership Report with every trust quitclaim deed processed in California. Without this report, any deed submitted to fund a trust will be rejected by the County Recorder’s Office every time.
Any reasonable person appreciates the old adage: “you get what you pay for.” You shouldn’t expect to get high-end, gourmet quality faire at a drive thru. The same standard should also apply to estate planning. This small investment of time and money is a worthwhile endeavor. But unfortunately, many (otherwise) sensible people come to realize this fact the hard way.
1. “They cost too much.” A properly written and legally enforceable living trust typically has a higher initial price tag than what a will does. But, when you take into consideration the privacy, legally enforceable provisions that will protect your assets, and expeditiousness with regard to taking decisive action to safeguarding your interests, a living trust is a very worthwhile investment. In addition, living trusts address such contingencies as making arrangements to care for your (or your spouse) should you become incapacitated, the rights and duties of the acting trustee with protecting your real and personal property (if you’re unable to), and in carrying out your detailed instructions for the dispersal of your estate to your loved ones upon your death. Once more, living trusts are invaluable in that they can enable you to avoid both conservatorship court proceedings and probate altogether.
2. “I’ll lose control of my assets!” With you and/or your spouse acting as trustees of your own living trust, you have the unquestioned authority to do anything with your assets as you see fit. You can make purchases, open/close banks accounts, take extended vacations, appoint/remove designated trustees, and you can even dissolve your living trust at any time (as long as you can make your own decisions). Plus, you alone control who (and at what time) will inherit from your estate.
3. “Trusts are just for the ‘well-to-do.” On the contrary, a living trust can provide protections for a wide range of estates. Wealthy clients are able to avoid having to pay excessive income/estate taxes. Families of modest means can be assured that if a conservatorship is needed, their net worth will not be severely affected (since living trusts contain legal language which accomplishes the need for such a contingency). In addition, trusts can be customized to protect children with special needs, pets, and for adult children who are not financially responsible.
4. “Everybody’s estate ends up in probate anyway, so what’s the point?” If your living trust is properly written, reflects current federal and state legislation, and your property has been correctly titled and transferred into your revocable living trust, your estate will not end up under the jurisdiction of the probate court. By operation of law, property held in trust for the benefit of another will (in most cases) bypass the probate process.
5. “I don’t want to have to pay trustee fees.” Oftentimes, as long as you are able, you don’t not have to pay yourself anything for managing your trust. If you prefer to hire the services of a professional trustee, they usually charge a standard percentage based on the entire net worth of your estate.
(Source: estateplanning.com/common-misconceptions. . . )
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One option that surviving family members can use to resolve any contested probate/estate administration matters is through Alternative Dispute Resolution or ADR. Instead of “lawyering up” and pursuing traditional litigation to resolve their disputes, relatives who are at odds can utilize the methods of ADR to arrive at solutions that are far less costly (and in many ways) more constructive to everyone involved. Originally used as a means to find common ground between litigants in small claims cases, Alternative Dispute Resolution values negotiation over having to file a lawsuit.
In an effort to preserve family cohesion and to protect their assets, ADR brings all interested parties together in an informal/confidential setting. Usually, they are presided either by a retired judge or by a practicing attorney. Once the issues in dispute have been identified, the mediator then asks each party to give reasons why their contentions should be granted. This approach is meant to provide a safe setting for family members to express concerns, ideas, and to work out their own solutions in light of their parent’s wishes. In addition, unlike a courtroom where arguments can be silenced by formal objections, ADR meetings encourage uninterrupted expression from each participant. It is through this process of questioning and answering that mutually agreeable solutions can become a reality.
Any settlements are documented in what is known as a Memorandum of Understanding. All parties sign the accord (which contains all of the ideas and issues discussed, solutions proposed, and a statement of whether or not, and to whom, the memorandum may be released to). This document is a great resource, especially when a family member raises an issue or concern about the family estate in the future (to remind him/her of their full-hearted participation with the meeting). Conferences in Alternative Dispute Resolution are not legally binding. Any interested party will always have the right and privilege to forgo ADR and to pursue formal court proceedings with their claim(s).
We, at Bezaire, Ledwitz & Borncamp, APC have expert mediators who can assist families in dispute over estate administration matters come to an agreement outside of the context of the courtroom. We have a proven track record of positive outcomes for our clients in a wide range of mediation cases.
Sources: estateplanning.com/How-To-Prepare-Heirs and smartestateplans.com/mediation