A Living Trust can be a wonderful tool to protect your family, as a living trust lawyer Las Vegas NV relies on can attest. The Living Trust became popular in the 1970s because the probate bar was raising their fees to the point where families were spending thousands of dollars when their loved one died. Since then, Living Trusts have been used to help folks with mental incapacity and to protect children from lawsuits. While these are powerful tools, many folks still end in probate despite spending good money to form a living trust. Here are three key components of a living trust to help you get the most from your plan.
Fund Your Trust
Funding is the process of transferring assets to your trust. Think of your trust like a bucket that can hold things you own (an imaginary big bucket). If the bucket has all your assets in it, then the probate process is avoided when you die. If you leave your house in your name and fail to transfer it to the trust, the courts will have jurisdiction over the house and it will require judicial oversight upon your death.
Probate is triggered when you die with a certain amount of money in your name or if you own real estate at your death. If you form a Living Trust but you don’t transfer the assets out of your name, you will not avoid probate because, once again, the probate is triggered if you die with assets in your name.
Use a Last Will and Testament
Even if you have transferred all your assets to your Living Trust, there is no guarantee that all the assets you owned were transferred properly. Therefore, you should always prepare a Last Will and Testament where the beneficiary is the Living Trust. Let’s say you own a home but the deed was not prepared properly and it is determined that you are still the owner of the property. There is going to be a probate on the home, and there is nothing that can be done at that point to avoid it. However, in probate, you want to make sure that the home is given to the person you have chosen without a public trail for all the world to see. To ensure a smooth transition, you should have the will give all assets that you have in your name to your Living Trust.
Execute Powers of Attorney
A Living Trust is not a substitute for a power of attorney in the event that you lose your mental capacity. The Living Trust has control over the assets you transferred to it, but if you lose your mind there are a whole host of issues that you will want to delegate to a friend or family member such as dealing with government benefits, filing taxes and running a business. If you fail to execute a power of attorney and you lose your mind, the court will make you a ward of the state where the fees will easily reach into the thousands.
A Living Trust is a wonderful tool if it is properly funded, if you use a Last Will and Testament and you prepare a financial power of attorney.
Thanks to our friends and contributors from The Law Offices of Gary L. Fales & Associates for their insight into living trust plans.