A Trust is a versatile document that can address a vast array of circumstances for those preparing an Estate Plan.
The primary benefit of setting up a Family Trust is the avoidance of probate. For those who make such a trust the cornerstone of their estate plan, as each spouse passes away, their survivors and family members are not required to go to court and go through the expensive and time-consuming probate process.
But there are other circumstances for which a Family Trust is well-suited. For example, a blended family can create its own challenges when it comes to Estate Planning. Or if a child or grandchild has special needs, a Family Trust is usually an excellent vehicle for dealing with those circumstances. Likewise, if children are less mature in handling finances than a parent might wish, the creation of a Family Trust may be an effective tool to train them to behave with greater financial maturity.How Does a Family Trust Work?
If you decide to create a Family Trust, here’s how the process will unfold.
At your free initial consultation, you will have time to ask questions and discuss concerns with your attorney. As the discussion progresses, your attorney will begin to outline the details of your trust for you.
If you proceed with a Family Trust, your attorney will create the documents needed. You will be both the Grantor (who creates the trust) and the Trustee (who has exclusive control over your own assets in the trust) of your trust. The creation of a Trust does not give anyone else control over your assets as long as you’re alive.
On the other hand, if you are still alive, but have become incapacitated, within your trust you will have named a successor Trustee who is authorized to step in to help you manage your assets and make sure your bills are paid.
When you pass away, your successor Trustee will then follow your instructions for the Trust. If you were married, the Trust will continue to be used to take care of all of the needs of your spouse until he or she passes. If you were not married when you passed away, then the Trustee will follow your instructions as far as dividing and distributing your remaining assets to your heirs.
If all of your heirs are mature adults, the successor Trustee will usually quickly divide up the assets and distribute them. If liquidating those assets will help that process, the Trustee has the authority to do so.
But if your heirs are children or immature adults, then the successor Trustee will usually retain the assets in the trust until the heirs are old enough and mature enough to receive their inheritances. This reduces the risk of a squandered inheritance.What Other Documents are Included With Your Family Trust?
For those who decide to take advantage of a Family Trust, the trust package should include the following:
- Family Trust Agreement;
- Last Will and Testament(s);
- Living Wills to direct your medical care in the event you are incapacitated;
- General Powers of Attorney authorizing your chosen Agent(s) to act on your behalf if necessary or convenient; and
- Warranty Deed moving your real estate into the name of your Trust.
At the end of your free initial consultation, a follow up meeting will be scheduled a couple of weeks later. During the period between the two meetings, your attorney will prepare all of these documents and mail them to you for your review.
Then, at the second meeting, you will review the documents together. Your attorney will answer all your questions and will make any necessary last minute revisions to your documents.
When all that is done, you will sign, witness, and notarize all of the documents. Then you’ll have a list of additional steps to take to change the ownership of your assets into the name of the trust.
But don’t forget that, because you are the Trustee of your own Trust, you will continue to have the exclusive control of your assets, even when they are in the name of the Trust. As before, you retain the right to sell them or give them away.Call Now for Your Free Initial Consultation
If you’d like to visit with one of our attorneys for your free initial consultation, please give our office a call at 208-939-2600 and we will be pleased to schedule your expedited appointment.