Why use a trust? - Consolidated property management,
- Puts everything is in one basket
- Instructions for the care during aging
- Protect surviving spouse from impoverishment
- Support minor children
- Protects adult children spendthrifts
- those vulnerable to 3rd party influence
- others have addictions, special needs
- Avoid probate with fully funded trust
- Reduce delay/costs of distributing property at death
- Easier for survivors at trust makers' death
Why use a will?
- Guardianship of minor
- Lack probate assets
- Less tolerance for retitling assets
- Easier on front side for trust maker
- Best plan use both trust and will
- Trusts and Wills
- Client control stronger with trust
- Probate avoided with funded trust; not will
- Will permits judge to fund an unfunded trust as a safety net so with a living trust we use both a trust and a will [will is usually 'safety net']
Why not just stay with my old 'out-of-date" will/trust, or nothing all? - 'Intestate' laws detail who gets what
- Judge picks executor-you have no say
- Surprise ending with unforeseen beneficiaries inheriting your wealth or it escheating to state
Who are parties to trust? - Settler, the client, makes the trust;
- Hence is called trust maker
- Trustee controls the trust
- Beneficiary receives trust income and principal
What are the trust makers' seasons of life? - Alive and Well
- Alive but not well, incapacitated
- Caused by illness, aging or medical condition
- Death
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Why do seasons of life matter?
- Many telescope seasons when talking about a trust which leads to confusion
- Discussing each season separately clarifies trust operations
How does a trust work during seasons of life?- While trust maker alive and well, trust maker is trustee [control] and beneficiary [life-time beneficiary]
- Wile alive but incapacitated trust maker is beneficiary
- Hand picked disability trustee makes decisions
- At death, trust maker's handpicked trustee follows trust instructions
- Distributes trust funds to family members, friends, and charities [death beneficiary]
- Add special protections for adult children with challenges, such as spendthrifts, shaky marriages, special persons with special needs
How many court proceedings are avoided with a funded trust? - Living probate, or conservatorship, for incapacitated
- Death probate
Does avoiding court cost less and move things along faster?
How do Trusts and Powers of Attorney work together for the best disability planning? - Financial Power of Attorney aids in decisions outside trust
- Health care Power of attorney delegates medical decisions
- Living will permits one to die naturally if no quality of life
How does trust avoid probate? - Property re-titled into name of trust
- Picks new trustee without court
- Re-titling can be accomplished by trust makeragent to power of attorney [POA] or court in pour over will
- Home, counsel drafts a gift deed into trust
- Bank or investment account, new trust acccount
- Insurance, beneficiary designations
- trust is named first or second beneficiary
- spouse second
- For retirement plans spouse is primary beneficiary
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