Why Do You Recommend Trusts As A Basic Strategy For Estate Planning?

I recommend trusts as a basic strategy for estate planning when the situation dictates use of a trust. Common instances where I typically do not recommend a trust are when someone has a simple distribution scheme where beneficiary designations on accounts can be used to avoid probate, along with powers of attorney, and there is a close family situation. Another reason not to use a trust is if most assets are held in qualified pre-tax retirement accounts. IRA and similar accounts are not able to be titled in the name of the trust, therefore, you do not get much benefit from having the property in a trust. I do not recommend trusts when there is a simple family situation such as husband and wife married for 60 years with one adult child who has their act together. A lot of times, people do not want to spend the money on a trust when beneficiary designations could be sufficient.

I will definitely not recommend the trust if someone is not looking to spend the money right now on proper and attentive trust planning because the cost of setting up a trust will be double or triple the cost of merely doing a will and handling everything else with beneficiary designations. Common situations pointing to use of a trust would be ownership of real estate in multiple states where creating a trust will avoid having to do probate in multiple states. I will strongly suggest a trust when there are multiple beneficiaries or complicated distribution schemes that you are seeking , such as certain percentages that are not visible and/or multiple beneficiaries. Trusts are easier to use when you are dealing with multiple beneficiaries, generally anything above four. (cafedantorels.com)

Trusts are also much easier when there are several different assets and beneficiaries involved. It can be easier to coordinate everything using a trust for organizational purposes. Coordination of inheritances and beneficiaries in one document can make more sense than dealing with multiple assets and multiple beneficiary designations, especially when there are parcels of real estate throughout the United States or just in Florida or accounts with multiple financial institutions. The trust can be set up simply to avoid the time and costs of probate or as complex to deal with a myriad of situations that people can face or benefits they are looking to achieve. It all depends on somebody’s personal situation.

Is A Will Just As Good As A Trust?

A will can be just as good as the trust in very limited situations. Usually a will is just as good as a trust as a means of saying where you want your assets to go upon your death. The cost of going to probate court and dealing with assets using the will and settling an estate that is governed by a will is much more complex and time-consuming than settling a trust. In many cases, if someone has to go through probate court because an asset does not have a beneficiary or a joint owner or is not named in a trust, then the will controls and there is a process in order to effectively transfer assets at death. I do recommend even when doing a trust to create a pour-over will. In many cases, it is hard to give a reason why a will is just as good as a trust.

How Can A Trust Avoid Probate?

A trust avoids probate due to the nature of the trust agreement. An asset must go through probate when it has only the individual as the owner, so that means there is no joint owner or beneficiary. If you change the ownership name of the asset from the individual to a trust, that means you, the individual, no longer owns the asset, your trust owns the asset. The trust does not die when you die. If you are the trustee of your trust, the trust will generally state a new successor trustee, to take over upon your death. You can name that successor trustee who will take over in the trust. When someone passes away with an account held in trust, their successor trustee would obtain a death certificate and execute a new certification or trust in order to take control of the trust asset. That process generally does not require court proceedings or notice to other beneficiaries. It is something that simply can be triggered with a death certificate. The trust does not die when the creator dies so there is no need for probate; there is just a need to find the correct successor trustee to handle the trust assets.

What Happens To A Trust Upon The Death Of Its Maker?

When the creator of a trust passes away, the person typically named as the successor trustee needs to coordinate with the funeral home to obtain a copy of the creator’s death certificate. It should typically take 10 days or less from the date of death to obtain the death certificate. Once the successor trustee has the death certificate, it can be used to show all financial institutions along with a certification of trust to transfer control of the assets, but not ultimate final disposition of the assets, to the named successor trust trustee. From there, the named successor trustee is able to have control of the assets to pay final expenses and bills and make distributions to the beneficiaries according to the creator’s wishes as stated in the trust document.

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