FREQUENTLY ASKED QUESTIONS
A trust is merely an agreement, like a contract, between two parties. The person establishing the trust (the “Settlor” or “Trustor”) and the person holding the property (the “Trustee”) hold property for the benefit of another (the “Beneficiary”). In a typical living trust, these three legal “persons” are the same person; you. The term “living trust” means that the trust is established and funded during your lifetime, as opposed to a testamentary trust which is created in your will and must go through probate to be funded. In order for a trust to be a valid, binding instrument; all that is necessary is for the parties executing it to have the legal capacity to enter into a contract, including age and competency, and for the trust to actually own something (the “corpus”). To fund the trust, you can assign, deed and transfer your assets into the existing trust, including your real property. Once the trust is signed, dated and acknowledged by a Notary Public, it is in full force and effect. Neither your trust nor your will need to be recorded, with the exception that the deed transferring real property is usually recorded with the applicable Recorder’s Office.
A well thought out estate plan ensures that your plans for your medical care, guardianship for minor children, and management and distribution of your assets will be carried out according to your wishes and not left to the State or others to decide.
Yes. But your family may not like it. The government’s estate plan is called Intestacy and guarantees government interference in the disposition of your estate. Documents to appoint an Administrator must be filed with the Probate Court and their approval must be obtained. If you fail to plan for your estate; you lose the opportunity to protect your family from a complex process that can be timely and costly; and which might have unwanted consequences in the distribution of your estate. Additionally, you have to consider estate taxes. There is much you can do in planning your estate that will reduce and can even eliminate estate taxes.
The court will appoint guardians for your minor children. The probate court may appoint a conservator or guardian to make decisions about your medical care if you are unable to do so. Without a valid estate plan all decisions about your estate will have to be approved through the probate court system.