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Living Trusts

The key to effective estate planning

Why Create A Living Trust

For most people, the first step in estate planning is to create a will, but there are more comprehensive options. A revocable living trust can provide you with many benefits that are not available with a will.

A will communicates how you would like your assets to be distributed upon death and who you want to administer your estate.

A revocable living trust (sometimes called an inter-vivos trust) is similar in that it does all this. However, it also allows you to retain control of your estate before and after your death.

Key benefits of A Living Trust

Avoid Probate

Avoid Legal Fees and Delay

Probate proceedings can take up to a year or longer. Until the courts decide on the distribution of the property, the assets are typically "frozen". It can easily cost from 3% to 7% or more of the total estate value.

Plan for disability

Ability to plan for disability

If a court finds that a person cannot make any or all of their important life decisions, that person can be considered incapacitated. With a will, the court would appoint a conservator to take care of finances. With a living trust, the choosen successor takes charge.

Greater Privacy

Greater Privacy

In addition to the expense, probate is public. All information about a deceased person's assets, liabilities, beneficiaries, and personal representatives are a matter of public record. Anyone can access your probate court file for their benefit.

There are some important benefits of setting up a revocable living trust as opposed to a will, namely:

  • No probate: Unlike a Will (for assets over $75,000), assets included in a revocable living trust are not subject to probate. This avoids possible delays of months or even years, as well as expensive executor and legal fees. A successor (named in the living trust document) is able to administer your estate to transition your assets.
  • Ability to plan for  disability: If you become unable to effectively look after your estate or become incapacitated due to mental disability your named successor can manage your financial affairs without the expense and delays associated with further legal work. A Will on its own won’t allow this and your loved ones would have to ask the court to appoint a conservator to manage your financial affairs.
  • Greater privacy: If privacy is important to you or your beneficiaries, a revocable living trust is more secure than a Will as it remains a private document. A Will, on the other hand, will be a matter of public record because it must be filed with the probate court.

Why Trajan vs. Other Options?

Yes, there are plenty of legal templates and other attorneys out there.
Here's why our trusts are better.

What a living trust includes

  • Power Of Attorney
  • Advance Healthcare Directives
  • Transfer deeds

Granting power of attorney allows those closest to you to administer your financial affairs and decide on health matters in the event that you become incapacitated.

There are two main types of power of attorney to consider:

General Power of Attorney

This is where you nominate another person (or a small group of people) to handle your finances. This can take effect immediately or be triggered by incapacity through illness, injury or mental decline.

The powers granted can be wide-ranging or specific, according to your wishes, but all documents must be drawn up, signed, and witnessed, according to state law.

Medical Power of Attorney

A medical power of attorney nominates another person (or small group of people) to make medical decisions on your behalf, especially in case of emergency. They do not take effect until you lose the capacity to make healthcare decisions yourself.

Your medical power of attorney document contains provisions to instruct and guide your agent in the management of your health care.

Another way to plan for your future healthcare requirements is to set up an advance healthcare directive. This is sometimes called a living will. It is similar to a general power of attorney but allows the agent(s) you appoint to:

  • Access your medical records
  • Make health care decisions on your behalf
  • Make end-of-life decisions
  • Handle your mortal remains

An advance healthcare directive can start with immediate effect, although it is more common to draw up the documents beforehand.They will come into effect if you become incapacitated and cannot make decisions for yourself, which would be decided by doctors.

Your personal residence should typically be transferred to a revocable living trust utilizing a transfer deed.  This ensures that your heirs will not have to go to court to obtain ownership of your home.

Also, by owning your residence in your trust, your home will be protected from your heirs creditors.

Transfer-on-death deeds or beneficiary deeds – Alternatively, if you are not interested in the protection a living trust can provide for your beneficiaries, you can avoid probate for your home by naming a beneficiary(ies) in a “transfer-on-death deed” or “beneficiary deed”.  

These deeds do not take effect immediately after they are signed and recorded. Instead, the property is transferred upon death, bypassing probate.

This is a useful estate planning tool for anyone who wants their personal residence to avoid probate and is confident their heirs are doing well enough that they don’t need the protection from creditors, divorce and substance abuse that a revocable living trust can provide.

One more Question

Why Revocable Vs. An Irrevocable trust?

A revocable trust and living trust describe the same thing: a trust in which the terms can be changed at any time. An irrevocable trust is a trust that cannot be modified after it is created without the consent of the beneficiaries.

An irrevocable trust is available as an alternative estate planning vehicle. The main differences between a revocable and irrevocable trust are:

  • Lack of flexibility in an irrevocable trust – once it is set up, it is more difficult to change. Assets cannot generally be taken back.
  • If you are sued, a revocable trust offers no protection from creditors: the assets in the trust are considered to be owned by you. An irrevocable trust on the other hand can protect your assets from creditors.
  • An irrevocable trust removes the value of the property from the estate, so estate taxes apply if your net worth is larger than the applicable estate tax exemption.

These differences are one of the areas where our expert estate attorneys can provide guidance. Hiring a lawyer experienced in setting up living trusts and other aspects of your estate plan will help you choose the best personal options.

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