Why a Living Trust?

Introduction

A Forewarning

Chapter 1
Chapter 2
Chapter 3
Chapter 4
Chapter 5
Chapter 6
Chapter 7
Chapter 8
Chapter 9
Chapter 10
Chapter 11
Chapter 12
Chapter 13
Chapter 14
Chapter 15
Chapter 16
Chapter 17

Why a Living Trusts : The All-Important Issue of Control

Keeping Control In The Family Is The Greatest Gift You Give With A Trust
No one would argue that avoiding expensive probate fees is a valid and sufficient reason for a trust all by itself. Everyone hates outrageous legal fees and this is the reason many presentations begin with that topic. But as you develop an experienced view, you come to understand there is an even greater gift you bestow on your family by using a Living Trust -- control. That is why this discussion starts with the all- important issue of control and its highly advantageous effect of greatly easing and simplifying matters on the family and those trying to settle the estate. This one benefit is so compelling that it would make a Living Trust worthwhile even if the costs were the same as probate (which they are far from).

To fully appreciate the advantage of control you need to develop a sense of how diametrically opposed the two processes are to each other in reaching the same end -- how one imposes numerous obstacles and headaches, and how the other just gets out of the way.

Lessons Learned The Hard Way
A recent phone conversation with a gentleman scheduling an appointment to complete a trust serves as a great illustration. In the course of the dialogue he asked if our law firm handled probates. I said “No, we wouldn’t feel right about making money on probating Wills while so steadfastly urging people to avoid probate”. He then mentioned that his mother had just passed away leaving only a Will and her house. Sadly, I stated that he was going to have to go through probate to settle his mother’s estate. He replied that he had already figured that out before the phone call and that he now realized that probate was going to be very expensive and involve a year or two of lawyers, bureaucratic paper shuffling, court appearances and hearings, court permissions and approvals, etc. -- all before the estate could be distributed.

This gentleman went on to say he had always assumed he could simply journey to the county recorders, file a few papers, and then the family would automatically “take over”. I don’t blame anybody for thinking it should be this way but unfortunately, as he was shocked to discover, such is not the case – at least not with a Will.

The Moral of The Story
The lesson you can learn from this story is this: If his mom had utilized a Living Trust, settling her estate would have been very much like the gentleman originally imagined it should be. In short the family would have been in control. Through the filing of a few papers at the county recorder, the family would have indeed immediately been in charge and instantly vested with the power to sell the house and go on about the business of carrying out her wishes and dividing up the assets equally among the children. Accessing bank accounts to pay funeral expenses, mom’s bills, etc. is just as simple with a Living Trust – and this same easy transition occurs for every asset passed by a trust.

With A Trust Your Family Takes Charge Immediately
Allowing your loved ones to stay in control instead of subjecting them to the government, courts and lawyers is the greatest gift a Living Trust bestows on your family. This is the utmost benefit of a Living Trust and it is impossible to overemphasize the real life benefit. This truly dramatic impact of a trust is the ability for your family to immediately step in and begin paying bills, gaining control of assets and starting the process of settling your estate without interference. No courts to go through, no filings, no court appearances or hearings, no waiting period, no approvals or permissions, no external delays, no waiting for papers to be issued by the court -- no need for any court involvement. It lifts an immeasurable burden and hassle off the family that keeps them from having to go through that which they arguably should never be required to go through in the first place. Why should a family suffer the dual indignities of having to pay and thank a lawyer, a judge, a bank and others first for allowing them access -- then for finally letting them have money that is rightfully theirs (minus a hefty probate processing fee of course)?

A Will Means Your Family Surrenders Control To The Government, Courts & Lawyers
So understand, when you use a Will to pass your property the probate system effectively seizes control over all of your assets and your family loses all control. This means that the state, not your family or heirs, is really in control of your assets until they are distributed (an average of 2 years later). That translates into two years of lawyers, bureaucratic paper shuffling, court appearances and hearings, court permissions and approvals, etc. -- all before the estate is distributed and your assets get to whom you intended. A flow chart for probate -- listing all the requirements, processes, duties, and filings -- is extensive and overwhelming to anyone but a probate lawyer. Decisions to sell assets, write checks, manage assets, and distribute assets are subject to a very rigid process. From the point forward of your death little is done without the courts approval and permission – and gaining or seeking that is no short, easy, or trivial matter. In fact it is quite involved, lengthy, and complex. The indignity and hassle of this can’t be overemphasized. I have literally seen people unable to pay for the funeral of their parents because the simple matter of gaining access to a checking account to write checks for even the funeral is a major affair. No bank or other institution is generally going to let you touch an account without “letters testamentary” issued by the probate court. This is true of each and every asset subject to the Will.

A Living Trust Means Your Family Keeps Control
When you utilize a Living Trust for your estate there is never any loss of control to an impersonal government process. In essence it stays a private affair between the family, beneficiaries, and trustee of your choosing. You designate ahead of time who you want in control, and in charge -- typically a spouse, child, or friend. Upon your death or incapacity such person is immediately vested with the power to manage your estate with the legally binding requirement to carry out your wishes and instructions in this regards. The beneficiaries enjoy legal protection because all successor trustees are legally bound by a fiduciary duty to follow the terms of the trust. This puts control where it belongs – with the family – not the whims of the state. It facilitates an immediate, uninterrupted, and smooth transition in the management and logical control of the assets.

What do you want for your family? What would you want?

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