In a culture fixated on youth and beauty, death is often a taboo topic.
Some people are so reluctant to breach the subject that they delay making an estate plan until it’s too late, leaving a confusing mess for their relatives to sort out.
But what if we told you that estate planning can help you while you’re still alive?
Consider what would happen to your assets, such as your home or business, if you were incapacitated by an illness such as a stroke, or an injury, such as a car accident. You might make a complete and total recovery, but would your assets survive?
They could if you’ve planned ahead. When people think about estate planning, they often think about writing a will. A will is a great first step in any estate plan, but it has its limitations. One of those limitations is that a will only takes effect after the testator’s death. It makes no provision for incapacitation.
Alternately, a living trust can work as a will substitute, but includes additional benefits not available in will. A living trust is a powerful and flexible estate planning tool that can be funded and administered during your lifetime and can benefit your loved ones after your death.
A qualified estate planning attorney can help you create a trust that fits your particular needs. A living trust has three key personnel. The Grantor creates the trust to hold property. The Trustee, who could be the same person as the Grantor, holds or manages the property in the trust and the Beneficiary eventually receives the property.
A living trust is also known as a revocable trust because the Grantor can change the provisions or revoke the trust at any point up to his death. For a living trust to work properly, you must fund the trust. That means adding assets by changing titles on real estate, stocks, CDs, bank accounts, investments, insurance and other assets with titles. You can also include assets that do not have titles such as jewelry, clothes, art and furniture.
The Grantor retains control over any assets that are added to the trust. The Grantor may add assets, such as property or investments, to the trust or sell assets from the trust. After the death of the Grantor, the trust becomes irrevocable, or unchangeable.
Assets in a trust may be maintained by more than one Trustee, such as a husband and wife. If one spouse becomes incapacitated, the other spouse retains access to the trust’s assets and can use them as necessary for the care of the other spouse. Alternately, if the trust has just one Trustee, a Successor Trustee, such as an adult child or sibling, may take over management of the trust due to the Trustee’s incapacitation.
Without a trust, a court appointee, not your family, would control how your assets are used to care for you, even if you have a will because a will only takes effect when you die. The courts would continue as your agent until your recovery or death. Without a trust, your spouse or business partner may be delayed or blocked from certain business transactions, such as the sale of property, because the court would be the new “co-owner” of your assets.
Life has many twists and turns and it’s difficult to know what’s around the bend. But with the help of a trusted estate planning attorney, you can be prepared for both life and death.