William Shakespeare, the Bard of Avon, said “A rose by any other name smells just as sweet.” In estate planning, having a different name can spell a world of difference. The difference can be termed as differences in “legal personality.” Dwight Edward Tompkins, a living trust attorney in Orange County, can help you differentiate you and your trust.
In estate planning, the estate owner or the grantor creates a trust which has a separate legal personality from him or her. Let us say the person’s name is William Smith. He creates a trust called The William Smith Trust. The two may sound the same but they are completely different. William Smith created his Living Trust after discussing with his estate planning lawyer who advised him that a Living Trust is one legal mechanism for him to avoid probate. So what William Smith does is transfer his assets to The William Smith Trust. Estates listed under the William Smith Trust are no longer owned by William Smith. After his death, his designated trustee can transfer assets to his designated beneficiaries – and they do not have to undergo probate. That is the first benefit of transferring assets to a trust. Assets in a Trust are not subject to probate.
The second benefit of transferring your assets to your living trust is cost-saving since probate is a costly procedure. In probate, the court will appoint a personal representative to oversee the distribution of the estate. This person will have to be paid from the estate itself. The personal representative will also be paying for newspaper notices advising creditors and beneficiaries of the death of the estate owner. Again, this cost money.
The third benefit of transferring assets is the confidentiality and privacy of a Living Trust. The beneficiaries in a Living Trust can receive their inheritance without having to go through the harsh scrutiny of a probate.
The fourth and final benefits of having your assets in a living trust hinges on the event of the grantor’s being mentally or physically incapacitated – a contingency that must be taken into account in estate planning. Not everyone suffers from being in a coma, a vegetative state or from Alzheimer’s. Yet one must also be prepared for such contingencies. When you create your Living Trust, your estate planning attorney will help you draft a Health Durable Power of Attorney which will empower your trustee to act on your behalf when you are faced with critical health issues such as “pulling the plug.”
Your trust may have the same name as you have. But you and your Living Trust will be treated as two different legal entities. The more assets you have in your Living Trust, the more you are making it easier for your beneficiaries in the event of your death or incapacity. Contact a living trust attorney in Orange County today to get started on your estate plan!