Living Trusts & Estate Planning

Living Trusts: These trusts are revocable and amendable. They are a substitute for a Will in the sense that the trust will control the distribution of the property held by the trust. The property titled in the name of the trust will not go through probate which is considered an advantage by many people. Living trusts can be very useful in disability situations, making it easier for loved ones to control the property. This use is often seen when parents are elderly and infirm, and they appoint one of their grown children to be co-trustee with them. This arrangement allows the grown child to assist the parents when they need it. It is convenient for  the parents and the grown child. To work, the trust must be appropriately funded. Accounts and real estate need to transferred to the trust. Beneficiary designations need to be updated to work with the trust. Trust planning can be more comprehensive than Will planning. Trust-based planning may make estate tax planning work better. A trust can hold real property located in multiple states, avoiding multiple probates. Living trusts may provide better control and segregation of property in second marriage situations in the event of disability or death.

Pourover Wills: It may seem contradictory, but even if you have a trust to avoid probate, the person still needs a Will. These Wills are called Pourover Wills because they generally have one major provision which says that if you find any probate property put it in the trust. Remember that the trust only controls property that is titled in the name of the trust, so if something is inadvertently left out of the trust, the pourover will puts it into the trust. When trusts are set up, people typically want to avoid probate, so they hope that the Will won’t be needed. However, estate planning is contingency planning, and a person could leave property out of the trust, requiring a Will to get it back into the trust.

Funding Documents: At the Bond Law Firm, we prepare the funding documents when clients create Living Trusts. This typically means that we prepare a deed to transfer their home to the trust. We prepare letters to be approved by the client transferring accounts into the name of the trust.  We update the beneficiary designations to make sure they fit with the estate plan.

Other Estate Planning Documents: The person creating a Living Trust and Pourover Will also needs a Health Care Power, Living Will, and Durable Power of Attorney for Financial Affairs. These are described in other sections.

DISCLAIMER: Nothing on this page is intended to be legal advice, nor should it be interpreted as legal advice. If you have questions regarding these legal concepts, you should consult an attorney immediately. We will be happy to schedule a free initial consultation with you to help you to understand your options under the law.