Do I Need a Living Trust ?

If you have children and/or own real estate, you should probably have a living trust in your estate plan. Living trusts are an effective way to transfer your assets to loved ones with minimal hassle and cost. In many cases, the family home is the main asset held within a trust. If you don’t own real estate and the value of your total assets are under $150,000, creating a living trust may not be cost-effective. However, having an estate plan is still crucial! Estate planning goes beyond just a living trust, it includes several key documents, outlined below, that everyone should have regardless of the size of their estate.

Trust Summary

The Trust Summary is a condensed overview of the key provisions in your living trust. It provides quick-reference information about trustees, beneficiaries,property distribution, and other important details. Since most people may not have the time or interest to navigate the complex legal language of estate planning documents, a well prepared summary is an essential tool for understanding your estate plan at a glance.regardless of the size of their estate.

Trust Certification

A trust is a separate legal entity; therefore, banks and investment firms often require documentation to open, close, or transfer accounts. While you can provide a full copy of the trust, most institutions only need the essential details found in a Trust Certification. Using a Trust Certification instead of the full trust document helps you meet their requirements while maintaining your privacy.

Pour-Over Will

The purpose of a pour-over will is to ensure that any assets unintentionally left outside your living trust are transferred to, or are “poured over” into, your trust upon your death. While the primary objective is to place all appropriate assets into the trust during your lifetime to avoid probate entirely, the pour-over will acts as a safety net, capturing any remaining assets and directing them into the trust.

Schedule of Assets

A schedule of assets in an estate plan is a detailed inventory of everything owned, including property, financial assets, and personal belongings, both with and without financial value. It’s a crucial part of estate planning, providing a clear and organized overview of the entire estate for accurate asset distribution and management. The last thing that your loved ones should have to worry about after you pass away is trying to figure out what you owned, where it is, and how to access it.

Assignment of Personal Property

You may own various personal items that don’t have formal titles, such as furniture, clothing, jewelry, art, and similar belongings. These assets can be transferred into your trust through a document known as an Assignment of Personal Property.

Durable Power of Attorney for Financial Affairs

A Durable Power of Attorney for Financial Affairs (DPOA) is a legal document that allows you to designate someone you trust to manage your financial matters on your behalf in case you become incapacitated or unable to make decisions for yourself. This document is also called a “springing power of attorney” because the power granted to the person you name only “springs to life” in the event of your incapacity.

Durable Power of Attorney for Medical Decisions

A Durable Power of Attorney for Medical Decisions (often referred to as a Healthcare Power of Attorney or Medical Proxy) is a legal document that allows you to appoint someone (called an agent or healthcare proxy) to make medical decisions on your behalf in case you become incapacitated and unable to make those decisions yourself.

Living Will/Advanced Healthcare Directive

An Advance Healthcare Directive (often referred to as a Living Will) is a legal document that allows you to specify your wishes regarding medical treatment in case you become incapacitated or unable to communicate your preferences due to illness, injury, or other medical conditions. It typically addresses situations where you’re unable to make decisions for yourself, such as being in a coma, terminally ill, or experiencing irreversible cognitive decline.

Nomination of Guardian for Minor Children

A Nomination of Guardian for Minor Children is a legal document that allows parents to specify who they want to be responsible for their children if both parents are unable to care for them due to death, incapacity, or other unforeseen circumstances. This document is especially important for parents with young children to ensure their children are cared for by trusted individuals in the event of an emergency, incapacity, or death.

Stand-Alone Will

A trust is needed in order to avoid probate and is usually recommended over a stand-alone will. A stand-alone will does not offer any protection from the probate process. A stand-alone will designates how assets are distributed, names an executor, and can include a nomination of a guardian for minor children.

Pet Trust

A pet trust is a legal arrangement created to provide for the care and well-being of a pet after its owner’s death or incapacitation. It is a specialized trust designed to ensure that the pet is cared for according to the owner’s wishes, with the funds and instructions necessary to meet the pet’s needs.

Special Needs Trust

A Special Needs Trust (SNT) is a legal arrangement created to provide for the financial needs and well-being of a person with disabilities or special needs, without jeopardizing their eligibility for government benefits, such as supplemental Security Income (SSI) or Medicaid. The trust allows individuals with special needs to receive financial support while preserving their access to important public assistance programs.

Bypass Trust

A Bypass Trust, also known as a Credit Shelter Trust or AB Trust, is a type of irrevocable trust that is often used in estate planning to minimize estate taxes for married couples. It allows a portion of a deceased spouse’s estate to bypass the surviving spouse’s estate, thus not being subject to estate taxes upon the surviving spouse’s death. The primary goal of a bypass trust is to take full advantage of the estate tax exemptions available to both spouses, reducing or eliminating the estate tax liability for their heirs.