We Answer Some Frequently Asked Questions About Estate Planning
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Can I transfer my international assets into the name of my U.S. revocable living trust?
Typically, no. But there are other options for addressing what happens to foreign assets when you pass away, depending on what country the assets are located in.
Can I transfer my rental properties into my revocable living trust?
Yes, you can, but for liability reasons, often the use of LLC’s may be a more attractive option, depending on whether you have a mortgage on your rental properties. You should talk with us about the best way to own your rental properties, so we can provide you your best options.
Can I prevent my spouse from giving my money away to a new spouse if I pass away?
Yes, if you set up a revocable living trust and structure if with certain protections and restrictions. For married couples owning joint assets, you can decide how to direct your half of the money when you pass away. Sometimes, spouses choose to leave their share of the money to the surviving spouse, outright and without any restrictions. This means that while the surviving spouse retains complete control and flexibility over the late spouse’s assets, the surviving spouse is also free to give the money away to a new spouse, or lose it to a creditor, predator, lawsuit, or divorce. Spouses do have the option to safeguard their share of the money upon their death, so it can support the surviving spouse, but also prevent his or her from giving it away to anyone other than the secondary beneficiaries they had agreed on (usually the children), or losing it to an ill-intentioned third party.
Is a Trust publicly filed?
No. A Trust is not publicly filed. It is a private legal document.
If a Trust is private, how would others know it exists if I pass away?
Typically, your assets, such as a home, bank account, life insurance policy, or retirement account, are somehow connected to the trust, either through the way these assets are owned, or through death beneficiary designations. This alerts family to the existence of the trust. We recommend that if you have a Trust, you tell your Trustee where you keep the Trust and how to contact your attorney in an emergency.
My loved one died but they had a trust. What do I do now?
If your loved one had a revocable living trust in place when they passed away, you will need to begin the trust administration process. You should contact us right away as there are time sensitive deadlines for administrating the trust. Even if the surviving spouse is still alive and it was a joint trust, you will still need to talk to an attorney to determine what is required to be done per the terms of the trust.
What is the difference between a revocable living trust and an irrevocable trust?
An irrevocable trust differs from a revocable trust because the assets you hold in it are no longer considered part of your taxable estate. It can provide protection from creditors, predators, lawsuits and divorces during your lifetime. Most people who set up an irrevocable trust do so in addition to setting up a revocable trust. It’s important to be strategic about which assets are placed in an irrevocable trust because the owner loses some flexibility and control over those assets during his or her lifetime.
What is the difference between a Will and Trust?
Both a Will and a Trust are legal documents that identify who you would like to inherit from you if you pass away. However, a Will is still subject to a long and expensive court process known as Probate when you pass away, while a Trust avoids the need for Probate and allows you to pass your assets privately, and efficiently, without the hassle of court.
My loved one died without having any legal documents in place. What should we do?
If a Will or Trust cannot be located, you should contact us as soon as possible. Many families find that when there are no legal documents in place, they may have to go through a court process known as Probate to determine who is responsible for making decisions now that the loved one is gone, and where the assets must go according to the law.
What is a Revocable Living Trust?
A revocable living trust is a private legal document your attorney sets up that addresses who you love, where you want your assets to go when you pass away, the terms for distribution to your loved ones, and who oversees making sure your wishes are honored. Because it is revocable, you can change your wishes at any time during your life. Revocable living trusts are private in nature, and are not publicly filed when you pass away. One of the most important steps in setting up a revocable living trust is connecting your assets to the trust, including your home, banking and investment accounts, life insurance policies, and retirement plans. To do this, you simply change the ownership or the beneficiary designations of the asset once your trust is established. Without properly connecting your assets to the trust, your assets could still end up in probate.
What is Probate?
Probate is a long and expensive court process that families must go through if their late loved one had more than $150,000 in assets that were not automatically passed to the family through a trust, joint ownership, or beneficiary designations, upon the loved one’s death. Probate is approximately 12-18 months long, open and public, and very expensive. For this reason, families usually plan to avoid their family being subject to Probate by establishing a trust.