It is a common misconception that estate planning is important for only those with money or who are advanced in age. This myth is a cruel deception. By investing the time now to plan your estate you could possibly save your loved ones months if not years of agony and literally hundreds of thousands to millions of dollars in court fees and/or estate taxes.
Arranging for the distribution of one's wealth is what estate planning is all about. A critical part of estate planning is creating documents that outline your wishes for distributing your assets after you die. Every individual has an estate plan. If you do not have a formal written will or trust, your estate plan is created out of default by your state. So the question is not whether you will have an estate plan, but whether you will have an estate plan of your own selection or one imposed upon you by law.
The Living Trust
An inter vivos trust, also known as a Living Trust or a Family Trust is a legal document that holds title or ownership to your real property and assets. When you create a Living Trust, you transfer ownership of your assets to the trust. Transferring assets is typically called "funding." When you transfer title you DO NOT relinquish control. You can still buy, sell, borrow or transfer.
To many the living trust looks a lot like a will. It includes the details and instructions for how you want your estate to be handled at your death. However, unlike a will a properly funded trust:
For a trust to be effective it has to own title to the property or asset. Remember, when you transfer title of your assets into the trust it is called "Funding your Trust." Funding is the process of transferring the name on accounts or property to the name of the trust. For example, accounts in the name of Bob and Jane Parker, would now be held as "Bob and Jane Parker, Trustees of the Parker Living Trust."
When the assets are in the name of the trust there is no need for probate since the estate is now controlled by the trustee of the trust. You and your spouse can be the primary trustees receiving full control to buy, sell, borrow or transfer in the case of a spouse's death. After both spouses pass, the trust identifies the person who will act as successor trustee. The trust gives that person the right to manage all assets on behalf of your wishes made known in the trust document. Remember, you and your spouse will decide who will manage all affairs.
Multiple Advantages to a Trust
There are many other estate planning techniques that address the issue of estate taxes and various end-of-life concerns. Please contact The Neighbors Law Firm to review your current estate plan.
As part of its streamlined practice, The Neighbors Law Firm is pleased to associate with and accept referrals from other attorneys and financial professionals to efficiently and professionally serve clients throughout all of North Carolina, Tennessee, and Virginia.
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