Living Trusts

A will is a document regarding your property, how you want it distributed and the people you want to leave it to. Your will can only benefit you after you die. It is a different thing from what you call a living trust, which can already benefit you while you are still alive.

A living trust is not only used to manage your property while you are still alive, but also to determine how this property, your estate and your assets, will be distributed after your death, so in a way, it is still quite similar to a will. Basically a trust will help you manage all your financial affairs. You can transfer all your property into a living trust, and again like a will, you can still make any changes to any arrangements and propositions. After your death, any remaining assets and property can be transferred into the living trust through a Pour-Over Will, and the name is pretty much self-explanatory. If you decide to make a living trust, it is important to make a Pour-Over Will to go with it. The property included in the trust are managed by one person (but it can be more than one, or even organizations as a whole) to benefit another. However the property is owned by the trust. The creator of the trust is called a settlor, and the people he/she has chosen to be beneficiaries of his/her property are called the trustees. The trustees become the legal owners of the property included in the trust, who hold the property for the benefit of individuals or organizations, called the beneficiary, that have been chosen by the settlor.

You can also make joint living trusts. Basically you can combine the property and assets of a married couple together into a single trust and it will be governed by a single trust document and validated by the law. There are certain complications when you wish to make a joint living trust, however, like tax minimization and such, so it is best to consult a lawyer to help you so there wouldn't be any more problems later on.

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I Have a Revocable Living Trust - Do I Need a Will, Too?

If you have a Revocable Living Trust, one of your main reasons for choosing this method of estate planning was likely to avoid probate.

Trusts Need to be Funded

So, you know that you need to fund your trust in order for it to be effective. In other words, you know you need to transfer property into your trust so that the property won't have to go through probate when you pass away.

Would it surprise you to know that, even if you have a Revocable Living Trust that you intend to fully fund, you still need a will?

At first blush, this may not make much sense, because a Revocable Living Trust is designed to help you avoid probate, while a will is designed to go through probate. But here's why you need both:

Why Wouldn't My Trust Be Funded?

People don't always fund all their property into their Revocable Living Trust before they pass away. There can be a few different reasons for this, for example:

• Sometimes, they buy property and just don't have time to transfer it into their trust before they pass away;

• Sometimes, for practical reasons, they intentionally leave property (like motor vehicles) out of their trust;

• Sometimes, they just plain forget.

What Happens When Property is Left Out?

Whatever the reason, if property is left out of your trust when you pass away, and it doesn't automatically pass to someone else through joint ownership or a beneficiary designation, then it's subject to probate. Without a will, property that goes through probate is distributed based on a formula provided by state law. This means that your property might not go to the beneficiaries of your choice.

The Solution

If you have a trust, you also need what's called a Pour Over Will. This is a will that directs all of your probate property to be distributed to your trustee. Once your property clears probate, your trustee will distribute it according to the terms of your trust. So, even though your left-out property has to go through probate, it eventually ends up where you intended it to go.

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How to Change or Update Your Will

Despite its purpose, a will is a living document, meaning it should be updated or changed as situations warrant and life changes occur. In fact, even if circumstances do not change, a will should be reviewed every three to five years. Life changes that may warrant an update to a will include:

• Marriage/divorce; • Birth of a child; • A minor child turning 18; • Moving to another state; • Change in wealth; • Purchasing or selling a valuable asset; • The death of a beneficiary; and • Legislative changes.

Simple updates to a will can be done using a Codicil. A Codicil is a document that amends an existing Will, and it must be properly prepared, signed and witnessed just like a Will. It's important that a Codicil be stored with the Will.

For more extensive changes, you may need to draft a new will. If you draft a new will, your existing will should be revoked. This can be done by not only destroying copies of the existing will, but including a statement in your new will indicating your intent to revoke the old will.

One issue that has come to light with 'do it yourself' will kits, is a testator, the person drafting the will, attempting to update a will by simply crossing out a portion of the will. This is called a "partial revocation by physical act," and although it may be allowed in some states, it is not allowed in Oregon, and can cause problems and inconsistencies within the document.

Working with an estate planning attorney to draft and update your will ensures that your true intentions are properly drafted in the document and lessens the chance of the will being contested.

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Choosing Your Power of Attorney Agent - Important Things to Consider

The Power of Attorney agent you choose will have complete legal authority to make decisions about your affairs. For this reason, it is crucial that you choose someone who is trustworthy and keeps your best interests in mind. Here are some common sense guidelines to follow when choosing your Power of Attorney agent:

• Pick someone who you really trust. They can be either a close relative or someone you have known for a long time. Don't trust your affairs to anyone who you think might not follow your wishes.

• Consider the cost. If you choose an attorney or accountant as your agent, there is usually a fee. Family members will usually perform agent duties for free.

•Choose someone with financial smarts. Your financial affairs will probably be better managed by someone who manages their own financial affairs carefully and effectively.

• Choose someone who agrees to do the job. Acting as your Power of Attorney agent is a big responsibility, and if the agent does not agree and understand the importance of the task, it might not be done well or the agent may back out later. Discuss the issue with your potential agent first and express your values and wishes with regard to how your affairs should be handled. This also gives the agent an opportunity to consider and communicate to you whether he or she is willing and able to handle the responsibilities.

Note: a Power of Attorney agent, sometimes referred to as an Attorney-in-Fact, does not have to be an attorney. The agent can be any adult that you trust and who is competent to handle your affairs. An agent can also be someone other than an individual, including a bank.

If you ever doubt your agent´s trustworthiness or if a conflict of interest arises, you should terminate the agent´s authority to act for you by using a Revocation of Power of Attorney document. As a follow up, you should also contact other parties who may have been relying on the authority of your agent such as banks. You may also appoint an alternate agent would become your primary agent if your first choice can not perform the duties when the time arrives. It should also be noted that a separate Power of Attorney must be created for each person. A "joint" Power of Attorney is not valid.

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Wills - What Happens If a Beneficiary Dies Before You?

It is always important to think about the impact of your estate if any of your beneficiaries that you already named, died before you or are unable or unwilling to receive the vested interest. It is even wise to think of these things, even if the beneficiaries are quite a lot younger than you. In usual practice, if a beneficiary dies before you and is actually not a descendant of yours, the gift you have given to them will lapse. If you want the gift to go to his or her spouse or child in the event of his or her death before yours, you should state this in your Will clearly and precisely. However if a son or daughter of yours is going to inherit something of yours under your Will but dies before you have died and has left children, the gift which was meant to go to your children will then go automatically to their children, therefore your grandchildren, unless you have made a special provision in your Will stating otherwise.

If there is a cash legacy (a gift of money) made to a beneficiary in your Will, such as £100 to my daughter Alice Hall, or even a specific bequest (item of property or personal possession), such as my grand piano to my uncle Thomas Cook, there will be no problem. However, if these named beneficiaries die without having obtained their cash legacy or specific bequest, then the gift will revert back to the estate and become part of the residue of the estate, which will go towards the amount of the estate that the beneficiary who is receiving the residue of the estate will receive in the event of your death.

If the main beneficiary who is meant to be receiving the residue of the estate of the testator dies before the testator and is not the testators direct descendant, then that part of the residue of the testators estate will be left indisposed of. This is called partial intestacy. This is where the lapsed share is then dealt with under the intestacy rules. It is therefore advisable to name any alternative beneficiaries in your Will in case the main beneficiary cannot receive the vested interest and is the only residuary beneficiary named in the Will.

However, in the event that the beneficiary to the residue of your estate dies after you, but before the bequest is actually paid to him or her, the beneficiary's estate will still receive that bequest and therefore it will not revert back to the testator's estate and then distributed to other beneficiaries.

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Estate Planning and Incentive Trusts

When you take stock of your assets and recognize the fact that your estate is going to have a considerable impact on the lives of your heirs, it is important to consider the personalities and proclivities of the each individual involved. There will probably be some family members who are ready to receive their inheritances directly with no strings attached at all, but you may have some nagging doubts about others. Younger people who are not established in their own right may lose their way if they find that they don't really have to gain an education and embark on a career path for financial reasons. And others may have personal problems or difficulty handling money, and these types of things can give you reason to take pause.

Incentive trusts are estate planning tools that you might want to consider to address these concerns. With these vehicles you set up the trust to make distributions based on certain stipulations that are intended to guide the beneficiary in the right direction. For example, many people create trusts that provide academic incentives. You may allow for regular distributions as long as the beneficiary remains in school, and provide for a lump sum distribution upon graduation. You can take that a step further and foster an ongoing work ethic by having the trust match each dollar that is earned by the beneficiary in his or her own right.

In addition to encouraging positive choices, incentive trusts can be used to discourage destructive behavior. For example, you could tie distributions from the trust to completion of a substance abuse treatment program, and add provisions for ongoing distributions contingent upon staying free of the addiction or addictions.

These are just a few common examples of how incentive trusts are used, but you can actually create such a trust with any stipulations you choose to as long as they are not illegal. There are obvious reasons to tread lightly and proceed with caution because you don't want your gifts to be met with resentment, but if you use them wisely incentive trusts can be a very useful inheritance planning solution.

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How a Trustee Should Communicate

The Successor Trustee of a Revocable Living Trust is the lifeline between the affairs of a decedent's estate and the beneficiaries. If beneficiaries have no idea what is happening with the estate settlement process, they may feel like they have no control and may begin to protest the actions of the Trustee. As Trustee, you must always keep the lines of communication open.

Early Contact

It is a good idea to begin the process of proper communication early. Share with all beneficiaries what assets are within the Trust and what actions you are considering taking with those assets. Let them know what responsibilities and powers you have as Trustee, and give them a general idea of how long you think it will be before the preliminary duties are finished and you can pass out inheritances.

This initial meeting or written letter to Trust beneficiaries is important to show from the beginning that you are on their side and you do not intend to hide information about the estate.

Regular Updates

By law, you are required to advise Trust beneficiaries of major actions, such as the sale of real estate. You must do so through notices to each beneficiary. You are not required to let beneficiaries know every single action you take, but it is a good idea, to advise them before you take major actions or if you feel they may object to a decision you have made.

Answer Questions

There is a good chance that among the group of beneficiaries one or two may question a decision that made you Trustee. There is also a chance you may simple come across a beneficiary who wants to know everything you do. This may seem irritating, but do what you can to appease the interest of these beneficiaries. By doing so, you will make your job easier in the long term.

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Incapacitation Planning for GLBT Persons

Planning for when you may become incapacitated is critical for everyone, but especially so for gay, lesbian, bisexual, and transgendered persons, as GLBT couples do not always have the same rights as heterosexual married couples under the law.

It is very important for GLBT people to think through what they want to happen if they cannot take care of themselves and their finances. You may want to have an attorney draw up the following documents and to spell out your wishes in each case.

• Durable power of attorney for finances-If you become unable to pay your bills or look after your finances, a court would probably appoint a biological relative to have control over your finances, if you have not already named someone to act in your behalf in these matters.

• Medical directive or living will-This document spells out your wishes as to prolonging of life and other medical care issues

• Durable power of attorney for health care-Also called a health care proxy, this allows another to make medical decisions for you if you are unable.

• Hospital visitation authorization-This names the people you wish to visit you in the hospital if you are unable to communicate this yourself.

• Instructions for disposition of your body and funeral arrangements-If you do not leave written instructions on these matters, most states will give control over your body to legal relatives.

In addition to these documents, it is very important for GLBT persons to leave a will designating who will inherit your property. If you die intestate, without a will or a trust, your same-sex partner is not legally entitled to inherit your property as a spouse would be.

To make sure your wishes will be protected, contact an estate planning attorney, who can help you with these difficult decisions.

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Making Changes to Your Will

If you have already written out a will and had it legally validated by the court of law, but would like to make some changes to the contents, then worry not, because yes, it is still possible.

You should read through your whole will carefully before signing it. However, mistakes cannot always be avoided, especially spelling or typing mistakes, so speak up if you feel that there is something wrong with your will, or if you might want to make some changes because of these mistakes or there are just certain things you want to add to your will.

The changes made to an existing will are called "codicils." Because it is important that proper and carefully chosen wording and formatting be used when writing out a will, then you should not make any handwritten additions or changes to the original document. You should make the changes in a separate page, while referring to the original will, and it should be done in the same format and still abiding by the formalities and legalities required in writing a will. The changes should of course coincide with the original and should be kept simple and easy to understand. It is difficult and more complicated if the changes are not really simple. If this is the case, then it is actually better to start from the beginning and write the whole thing over again. This can prevent any confusion, so it is also better to just get rid of or destroy the original document.

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Choosing An Online Will

Over a third of men and women in the UK could be over or approaching pensionable age, which means most of them are going to be thinking about what will happen should they pass on..When people consider dying, in addition they question what is going to happen to their money as well as property once they go. The primary approach to stop the anxieties that affect many people is to ensure that you get a will, particularly where property or even a good deal of cash is concerned. Getting yourself wills online can ease points for anyone left behind.. When you leave a will when you pass on, it is a legal record of just what you wish to happen to any real estate or capital and assets that happen to be still left after you pass on..

If you've not thought of making a will but when you're retired or around retiring you should get one drafted. A will makes it easier for your spouse or children to find the property and money.The internet has altered the way individuals do such things as writing a will. If you're computer literate it's no problem finding an online site that offers will making online. You ought to do some research before you decide to have your will drawn up on the internet. Many websites will ask for data and offer to draft the will to suit your needs in return for a charge, while other folks offer you will templates for people to enter your own information into the will/ Once information are inserted you can print off the actual information to get it witnessed and authorized.

It is possible to have a competent looking as well as legally accurate will written on the internet however, you may want to make use of the services of legal professionals if you have a lot of money or property or home. A number of solicitors provide will writing on their company website, and you can write and complete the information on the web or perhaps visit their business office. Wills that have your own signature, and the signature of a law firm tend to be valid. If you have a will drawn up and it is not signed by someone else as being a witness, then there might be difficulties for family members to obtain your money and property when you pass away.

There are actually disputes regarding acquiring do it yourself wills, and if it is far better for the solicitor to pen, witness and sign your current will. Wills which are professionally written by specialists and signed by the solicitor are considered to be legal and valid. Be careful if you decide to generate a will on the web, if it's not witnessed and signed by someone else, it could be rejected as a lawful will.

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Wills - When Is Inheritance Tax Payable?

Inheritance tax will be due at 40 per cent of a person's estate and is required to be paid on the value of an estate, including certain gifts and assets, that calculate to be more than £325,000 or if you are married or in a civil partnership £650,000. Any estates that are less than the nil rate band at £325,000 will be free of tax. Reducing inheritance tax is one of the reasons why people have Wills drafted for themselves. It can sometimes be charged on your death or later, on the death of a spouse or civil partner, therefore it is important for you to understand the tax well enough to know if you or your spouse or civil partner will be affected by it. There are a number of ways to potentially reduce the chances of inheritance tax but if in doubt, it is always a good idea to contact your solicitor or an independent financial adviser if you decide not to try and organise your finances yourself.

Inheritance tax is charged on the value of a person's net estate when it is in excess of the nil-rate band, and will only be payable on the person's death. Therefore a person will need to take into account all their property, assets less any liabilities and debts. Any funeral costs will also be deducted from the estate that is valued for inheritance tax purposes.

The Inheritance Tax Act 1984 states that it shall be charged on the value transferred by a chargeable transfer. It is therefore imposed that people should be prevented from giving away all their property immediately before they die to then avoid tax. Further to this, the rules provide that inheritance tax is calculated not only on the value of the property that a deceased person has when he or she dies but it takes into consideration the running total of gifts that the deceased has made over the last seven years. Therefore when calculating the size of an estate, it is advisable to look at all the gifts made in the last seven years up to and including the gifts made on death. The tax is first applied to these types of gifts and then on to the estate which is to use up the nil rate band on the gifts so that tax payable on the estate is increased. Inheritance tax is generally more subject to a person's property that is passing on death, but it can also refer to lifetime gifts unless they fall into an exempt category

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Health Care and Living Wills Versus Power Of Attorney

Within your own personal health care there is the end of life issues that can occur. Knowing how you want these handled is important, so that there are not other problems that can arise if the situation were to occur. Even where is a living will in place, a power of attorney should also be in place as well, this helps to ensure that all issues are thoroughly covered and you know you will be taken care of the way you want to in the event of end of life.

Living Will

A living will covers what to do and not do in the event that there are end of life decisions to make. This document only goes into effect when you are no longer able to make decisions yourself and you are incapacitated. This could be for numerous reasons, from a coma to an injury that has occurred. It also covers if you are completely mentally incapacitated as well. A living will typically covers:

Medical Care That Prolongs Life - This is care and treatment that will prolong your life. This could be blood transfers, dialysis, drugs, surgery or respirators for instance. DNR or Do Not Resuscitate Orders - These stipulations work with the above in the sense that you can specify whether you wish to be resuscitated or receive CPR. These types of orders should be specified to the hospital and doctors you work with, as well as wearing a medical alert bracelet that specifies this decision. Food and Water That Prolongs Life - This specifies whether you want to receive food and water through external means. This can happen when there is an injury or a coma and a person can only live through intravenous food and water. Typically when these are stopped a person will pass away from dehydration. You can specify if you want this type of treatment, the conditions when this should happen and for how long this should go on for. Management Of Pain - This is also called comfort care as well and it is when you decide to die naturally, but not in pain. You are kept comfortable while dieing to improve the quality of life and dignity in the event of death. You can specify that drugs do be administered to keep you comfortable, but not in pain.

Power Of Attorney

Even when there is a living will in place, a durable power of attorney for health care decisions is necessary and recommended. The agent is given only as much power as you decide and can cover all decisions that the living will does not cover. If you do not specify the amount of power given, many states allow the agent comprehensive power when it comes to end of life decisions. A durable power of attorney for health care can cover, but is not limited to:

The power to consent to medical treatments. The power to deny medical treatments. This is as long as it does not go against anything that is already in your living will. Making the decision of which medical facility to use. They can make the decision of which doctors and other personnel to use for your treatment. They can go to court on your behalf to determine whether to with hold or continue medical treatment. The power to decide what to do with your remains and whether or not to donate your organs. Make sure to specify your wishes on these matters in the living will and even in the power of attorney document when you have direct feelings about these practices. They can access your medical records. They typically do have visitation rights. What Is The Role Of A Probate Solicitor?   New Year's Resolution: Make or Revise Your Will   How Inheritance Claims Can Prove Very Difficult   10 Top Terms Used In Wills and Will Writing   An Intro Into Properties Planning   Special Needs Trusts - What Are They?   

Avoiding the Pitfalls of Wills and Probate in California With a Revocable Trust

Estate Planning is one of those topics that most people prefer to avoid. It makes them think about their mortality and what the future holds. So individuals who either live in or own significant property in California are often surprised to discover that once they pass away their estates are usually subject to the probate process. A primary value Estate Planning Attorneys can provide to their clients is to explain the difference between Wills and Trusts, as well as the financial and tax implications of probate on their estate. For many clients that are concerned with the negative impact of probate on their estate, Estate Planning Attorneys will often suggest the establishment of a Revocable Trust, which provides the flexibility of a will with the added advantage of private, non-probate administration--thereby avoiding the pitfalls of wills and probate in California when planning one's estate. To understand the benefits of a Revocable Trust, we must first review Wills and the Probate Process.

Wills

Many people, when they think of estate planning, immediately think of wills. A will is basically a letter of instructions about what a person wishes to have done with his estate following his or her death. Wills can be relatively simple, or they can be very complex, stretching over many pages of detailed instruction. Drafting a will allows a person to opt out of the default rules of the intestacy regime. A person can opt not to leave assets to a surviving spouse or child. A person can choose to leave gifts to persons and entities not covered in the intestacy rules, such as a close friend or a church or charity.

In addition, a person can put conditions on gifts in a will. Sometimes a person will have children who have substance abuse problems or mental or physical impairments. In cases like these, leaving a substantial inheritance that child might either enable the child's substance abuse or cause the child to lose state or federal benefits. A carefully drafted will can help a parent to make sure that he or she doesn't inadvertently create or exacerbate problems for his children by making unwarranted or ill-timed gifts.

Pitfalls of Probate

In either of the situations above, where a person dies intestate or with only a will in place, the person's estate needs to be probated if the gross value of the estate exceeds $100,000. Probate serves a useful function in society, by providing an orderly system for notifying heirs of distributions and making sure that estate assets go to the people who are supposed to receive them. However, probates in California are generally considered among the most onerous in the United States, for three main reasons.

1) Probates in California, like almost all court proceedings, are public. Any interested person can stop by the probate court and ask to see a copy of a person's probate file. The file will usually include the person's will, a list of heirs, a list of assets and their approximate values, and a host of other information. Many people consider this a violation of their privacy. 2) Probates in California take a long time-usually somewhere between eight months and two years. Certain assets of the estate are frozen during this time. It is not unusual in a probate for a surviving spouse to have to petition the court for an allowance from the estate to provide for day-to-day living expenses. 3) Probates in California are very expensive. Probate fees, which are the fees paid to the executor and the attorney for the estate, are based on a percentage of the gross value of the estate. These fees routinely run into the tens of thousands of dollars, even for relatively modest estates.

The Benefits of a Revocable Trust

For these reasons, many people in California choose to avoid the probate process by setting up a revocable trust. A trust accomplishes the same goal as a probate: distributing assets to the people who should receive them. However, a trust is generally considered superior to a probate for several reasons.

A properly drafted trust allows a person all the flexibility of a will, but with the added advantage of private, non-probate administration. A trust administration is private-the only people entitled to notice or accounting of trust assets are the beneficiaries of the trust. Distribution of trust assets can often be accomplished within a few weeks of the death of the person who set up the trust. In addition, a trust administration is usually fairly inexpensive compared to a probate. Where a probate might cost the estate almost ten percent of the estate's total value, a trust administration can often be completed for a small fraction of that amount.

Setting Up a Trust in California

Drafting a trust or a will may appear to be relatively simple, and many people use inexpensive forms or computer programs to set them up themselves. However, there are numerous pitfalls that can cause problems for the unwary. Oftentimes people will be unaware of important provisions in the law that may lead to unintended consequences. Sometimes individuals inadvertently disinherit someone they intended as a beneficiary, and sometimes, as mentioned above, individuals cause significant problems for beneficiaries who are receiving state or federal disability or other benefits. An improperly drafted trust can also cause significant tax headaches for a surviving spouse or child.

For these and many other reasons, it is always good practice to consult with an attorney who specializes in trust and estate law. The State of California certifies attorneys in several areas. Every county in the state has at least a few attorneys who have taken the extra training, education, and experience to become certified as specialists in estate law. These attorneys know estate law inside and out and are able to counsel with clients effectively on the potential problems that might await in an estate planning situation.

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Estate Planning Legal Basics

Planning for how your heirs and loved ones will inherit what you have built over a lifetime is a weighty and important topic.

If you die without a Will, most states in America have laws which explain how to distribute your assets. The law in your state considers you to have died "in testate" which is a fancy way of saying you didn't have a Will. Each states' laws differ on how a deceased's assets are distributed "in testate", but many state laws are very similar. It is typical of many state laws that estate assets are distributed in a successive fashion to the deceased person's heirs. Determining who is an heir of a person who died without a Will usually goes something like this: (1) children (2) grandchildren (3) nieces & nephews (4) the decedent's siblings (5) the decedent's parents, etc.

That is not a rule, but an example of how your estate will be distributed without proper planning.

Having a Will does not necessarily avoid probate. Probate is also not necessarily bad. The probate process was created so that the Court in the deceased's state, and county-of-death, can effectively administer the deceased's assets under the dictates of the Will. This can solve a lot of headaches for the personal representative or executor - especially when their is any kind of fighting among the deceased children and/or heirs. Sadly, fighting over the deceased's assets is more common than people often think. Having a Court look over this process can be a life-saver for the personal representative.

A deceased person often has assets in many different forms. Some of these assets will be found to be "probate assets" and some of them will be considered "non-probate assets" under the law of their state. It is important to differentiate between what is a "probate asset" and what is a "non-probate asset".

Probate assets are usually those assets which are owned by the deceased person in their name only. What does this mean? It means those assets which the Court can transfer, under the Will, in the probate process. Still confused? Here is an example: the decedent's home (or "real property") is a transferable asset which is subject to probate. Thus, it is a "probate asset".

What is a "non-probate asset"? A non-probate asset is any asset held by the deceased person hat can be transferred without going through the probate process. Non-probate assets can include: real estate held as a joint tenant with rights of survivorship, joint bank accounts, other joint accounts, pay-on-death (POD) accounts, a transfer-on-death (TOD) account, or property held within a Trust which was created by the deceased person prior to death.

If a Will or Trust is created, the deceased person will have appointed either a personal representative (under the Will) or a trustee (under the Trust) to administer the deceased's assets upon his or her death. The initial duty of the personal representative or trustee is to figure out how to lawfully deal with the assets. This is where an attorney comes into the picture. Hiring a good attorney is of the utmost importance in properly collecting and distributing a deceased person's assets upon death.

Next, the attorney and the personal representative of the deceased's person's estate must determine what kind of assets the deceased person had and whether those assets are "probate assets" or "non-probate assets". As was discussed above, there are specific kind of assets which must be discovered and sorted. It is often the personal representative's job to discover those assets, hunt them down, and report their existence to the attorney for review. The total amount of probate assets will provide the attorney and personal representative with a means to determine what approach must be taken to transfer the deceased person's property to his or her heirs. Furthermore, a second reason that this step must be taken is to determine whether the deceased person's estate will be required to file a federal estate tax return and the tax return of the deceased's particular state.

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Why a Living Trust Is Usually Made

There are several possible reasons why a trust is made.

A trust is created for privacy. While a trust is similar to a will, one of its differences is that terms stated in a will are made public while those of a trust are not. This is the reason why there are some families who prefer to use trusts, to keep them private from unwanted eyes and ears.

People also make living trusts for spendthrift protection. A lot of people seem to have a hard time budgeting and handling their money, and by putting money in the trust, one can protect him/herself from spending the money in ways not specified in the trust. There are several ways the distribution of money in a trust can be structured, and trustees can disburse the contents of the trust based only on the causes and beneficiaries specified in the trust document.

Living trusts also lend a hand in wills and estate planning. Trusts often appear in wills, as the distribution of property and estate in wills is a form of trust. There are certain parallels as well, such as the Executor of the will similar to the trustee and the children (who are usually the inheritors of the property in a will) are the beneficiaries. Because a trustee helps the beneficiaries during the whole process, having both a will and a living trust secures that your children get everything you intended for them through a trustee.

Another reason for getting a trust is for charitable organizations who must take the form of trusts as stated in most laws; there are other forms but the trust is the most common one a charity can take. Charities are for the benefit of the public. A trust can also be capable of working as an investment vehicle known as the unit trust.

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