Wills and Trusts

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The Living Trust

Deciding whether to invest in a living trust is difficult. You will need to weigh the likelihood, advantages and disadvantages of having your estate probated after your death against the cost of purchasing a living trust now. Try to stick to the facts and be wary of the exaggerated and often outrageous claims that living trust companies make about their products.

 

WILL: A will is a legal document that gives direction about how you want to distribute your property after death. It does not take effect until your death.

 

TRUST: A trust is a legal arrangement where one person (known as the “trustee”) controls property given by another person (known as the “grantor” or “trustor”) for the benefit of someone else (known as a “beneficiary”). Although it is not a requirement, with most living trusts, the grantors are also the trustees during their lifetimes, as long as they remain competent.

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What is in a Complete Revocable Trust Package?

Revocable Living Trust Agreement -1

Pour-over Will -2

Schedule of Assets -3

Assignment of Personal Property -4

Advanced Health Care Directive -5

Detailed Instructions for Funding and aftercare -6

Durable Power of Attorney for Finance  -7

Certification of Trust (recorded at the county clerk's office) -8

Grant Deeds/Quit Claim Deeds for transferring of Real Property into the Trust -9

Get the FACTS

  • Wills and living trusts allow you to choose how your property will be distributed after death. Although there are other issues to consider, the primary advantage of a living trust is that it can make it easier to avoid the delays and costs that sometimes arise in probate. Property transferred into a living trust before death does not go through probate. However, this may not matter to you because you may not have to worry about probate in any case.

 

  • Avoid giving out private information when you’re shopping around. Many companies will use the living trust as an excuse to find out more about your assets and then try to sell you other products such as annuities or life insurance.

 

The following is a selected list of publications, organizations and web sites that can help you decide what works best for you:

  • AARP, “10 Things You Should Know About Living Trusts”. For more information, contact AARP at 1-800-424-3410 or visit their web site at www.aarp.org.

  • American Bar Association (ABA), “Guide to Wills and Estates” (2d ed. 2004).

For more information, contact the ABA at 1-800-285-2221 or visit their web site at http://www.abalawinfo.org/mon1.html.

  • Council of Better Business Bureaus, Inc., 703-276-0100 or visit their web site at www.bbb.orgFederal Trade Commission,

  • “Living Trust Offers:

How to Make Sure They’re Trust-worthy” http://www.ftc.gov/bcp/edu/pubs/consumer/products/pro08.shtm.

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Will vs. Trust

-One main difference between a will and a trust is that a will goes into effect only after you die, while a trust takes effect as soon as you create it. A will is a document that directs who will receive your property at your death and it appoints a legal representative to carry out your wishes.

-By contrast, a trust can be used to begin distributing property before death, at death, or afterwards. A trust is a legal arrangement through which one person (or an institution, such as a bank or law firm), called a "trustee," holds legal title to property for another person, called a "beneficiary."

-A trust usually has two types of beneficiaries -- one set that receives income from the trust during their lives and another set that receives whatever is left over after the first set of beneficiaries dies.

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