Even If I Have a Will, Should I Still Consider a Living Trust?
Video Summary
Even if I have a will, should I consider a Living Trust? Well, let’s talk about what a Will controls and what a trust controls, and then we’ll try and then you’d need to decide whether or not you would want to do a will and a trust or whether you’re satisfied with just the Will control whatever assets are titled just in your name alone at the time of your death. A Will will not control any assets such as joint bank accounts or bank accounts, have a beneficiary. The same can be said for a brokerage account. You can set those up so that there is what they call a TOD or transfer on death. Also, it doesn’t control life insurance, IRAs, or any other annuities or any other document that has a designated beneficiary. All of that is controlled by contract or the signature card. Now, a trust only controls those assets that are titled in the name of the trustee. Whenever you pass away, you usually are the trustee of your revocable trust, and then you’ve designated a successor trustee. And so that will only control those assets that are titled in your name as trustee under your trust. And of course, that designates who you wish to receive those assets. So whether or not you need a trust or not, or you need just use a will or whether you can title your assets so they pass automatically by designating beneficiaries. That’s all a product or a result of doing estate planning. That’s why they call it estate planning is so that you can discuss that with the attorney as to whether or not you need a will join assets or a trust or all three. So if you have any questions, give me a call at (727) 847-2288.
Why Would a Trust Be a Bad Idea?
Video Summary
Why would a Trust be a bad idea? Well, the first question I ask clients when they come to see me, they want to set up a Trust, is said, why do you want to set up a trust? The usual answer I get is because I want to avoid probate. Well, there’s alternatives to that, particularly if you want all your assets to be distributed at the time of your death to the beneficiaries. If that is the estate plan and the purpose of the Trust, that can be accomplished by how you title your assets. Just like your bank accounts, you can set those up so that they’re payable on death to the beneficiaries. Doesn’t have to go through probate. If you have your home, you can execute an enhanced life estate deed called a Lady Bird Deed works the same as a payable on death bank account. You have all the rights of ownership during your lifetime, but upon your death, it’ll go automatically. Go to the beneficiaries with a death certificate and avoid probate. If you have a brokerage account with say, Merrill Lynch or Raymond James or any brokerage account, you can then set that up so that there’s beneficiaries. That’s called a TOD designation, so those would automatically avoid probate and go to the beneficiaries. Also, your life insurance, annuities, IRAs, all of those have beneficiaries or should have beneficiaries, and so none of those go through probate. So if you don’t have a good reason to set up a Trust, that would be a reason why it would be bad to set one up because you’re basically just spending money that you don’t need to. In the past, Trust had been set up to avoid estate taxes, but estate taxes have been now elevated to you have to have assets over $13 million before there’s any estate taxes. So that would be the circumstance whenever I would not recommend, or I basically don’t draftTtrust if the person wishes their assets to be distributed at the time of their death and designated. Now, there are good reasons set up Trust, such as if you have minors and you want to delay the distribution of their money, or if you have a beneficiary that has a drug dependency or is a special needs trust. Any number of other good reasons set up trust. But if you just wish to do it, to avoid probate and you want an outright distribution, I think that’s a bad idea and save your money as far as the cost of setting one up. If you have any questions, give me a call at (727) 847-2288.
I Place My Assets In a Trust Are They Protected From My Creditors?
Video Summary
If I place my assets in a trust, are they protected from my creditors? No. If you transfer your assets into what they call a revocable trust, which is usually set up as far as your estate plans concern, saying who you want to receive your assets upon your death, your assets are not protected, and in fact your assets are not protected. If you transfer your assets to any sort of trust or maintain control over it, the creditors can still attach these assets. This is particularly troublesome if you set up a joint trust between husband and wife, and that you do have some asset protection as husband and wife under ancy by the entirety. Since creditors get a judgment against just either spouse, they can’t attach assets that are titled as husband and wife. Whereas if you set up a joint trust or have a joint trust, you transfer your tendency by the entirety property into the trust. Well, it destroys that, and the creditors then may be able to reach the half of the assets that you placed in this trust. Some folks say, well, what about an irrevocable trust? An irrevocable trust? It means that you transfer your assets to a trustee and you have no longer have any control over these assets, and the trustee has to follow the directions, follow the directions that they’re provided in the trust, but you can’t make demand upon them. If they are put in this irrevocable trust, then they are protected from creditors. So if you have any questions about this, give me a call at (727) 847-2288.
What Is a Life Insurance Trust?
Video Summary
What is a Life Insurance Trust? A Life Insurance Trust usually means it’s an irrevocable trust when a life insurance policy is purchased by the person who’s doing their estate planning. My experience, they’ve been primarily used whenever you have a taxable estate and you wish to get a life insurance policy in order to be able to pay the estate taxes so that all the assets would pass through to the beneficiaries. The Life Insurance Trust is an irrevocable trust and that way by having the insurance policy not held in your name when you die, is not included in your estate for tax purposes. And the trustee then distributes them, uses the money pursuant to the provisions of the trust document to pay the taxes and also to pay the money out to the beneficiaries. But you have no control over the irrevocable life insurance trust after you purchase the policy. Of course, there’s an exception if you’re doing a term policy and you make the payments every month or every year. And so if you want to terminate the trust, well you quit making the term life insurance premiums and there’s nothing in the trust. There are some tax estate tax question or inclusion depending on when the life insurance policy is taken out and how much it is and what you need to do to avoid that. So if you have any questions, give me a call at (727) 847-2288.
What CANNOT Be Held in Trust?
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What cannot be held in trust? Well, I think just about everything can be held in trust, particularly all titled assets. If you’re dealing with a lender, a trust company, or a bank that serves as a trustee, or for that matter, any professional trustee or trustee, they may have some reservations about holding real estate, particularly vacant real estate in trust, having it in the trust since if there’s an environmental problem, there may be some question about whether the trustee then becomes liable for the environmental cleanup. So that’s always a question. Some of the other assets that are problematic, I don’t know that if you have cryptocurrency, they don’t title those. That’s simply numeric, and that’s all done through a wallet. So that would be another asset that I don’t know that you would be able to put in the trust. And so the other assets, which are problematic would be if you have gold, they can’t be specifically identified. And now how does the trustee do that as far as, I guess they could hold it, but would probably want to liquidate it to make it more accountable as far as that’s concerned, rather than having to safeguard it. So, there’s a few examples on items that are assets that may not be able to be held in trust, but certainly just about all titled assets can be titled in the name of the trustee for a particular trust, and of course, be governed by the provisions of the trust documents. If you have any questions, give me a call at (727) 847-2288.