Domestic Trusts

Revocable Living Trusts

PROCEDURE:
ONCE YOUR ORDER IS PLACED, YOU WILL BE CONTACTED BY A STAFF MEMBER FOR AN INFORMATION GATHERING INTERVIEW.

NOTICE: The following information is intended for educational use only. It is not intended to replace or supplement any tax or legal advice. Anyone should obtain tax and/or legal counsel before implementing any planning methods described herein.

Regardless of the size and value of a family estate, a Revocable Living Trust (RLT) can appropriately address virtually every family estate-planning need and provide the privacy, convenience, safety, and control that everyone wants. The usefulness, efficiency and cost savings of a fully funded living trust is well established. A living trust should be used as the foundational estate-planning device for every family with legitimate planning needs.

The Reality of Probate

When a person dies with assets in his name alone, as happens in the case when using a stand-alone testament/will, that person has become a decedent property owner. A decedent is obviously unable to transfer property to the living. The primary purpose of probate is to transfer title of assets from the decedent to the decedent's heirs. This retitling of assets first to the decedent's personal representative then to the decedent's heirs requires a court sanctioned and supervised procedure called probate.

Problems with Probate

Inherent complexities usually accompany the process. Probate normally requires detailed paper work,filings, hearings, appraisals, personal representative fees, court fees, lengthy holding periods and the like, all of which can incur a substantial amount of time and resources to process. Administrative fees will increase when ancillary probate becomes necessary for real estate not in the decedent's domicile. In addition, privacy is completely forfeited with probate; it is deemed a public matter - not a private concern. Because of the lack of privacy and control and the prospect of seeing the estate shrink due to improper planning, a decedent's family experiencing the probate process is subjected to another unwanted component stress. Probate should be avoided, and that can easily be accomplished with proper planning.

Conservatorship... Probate for the Living

Conservatorship requires a probate court to supervise and control the management and administration of an incapacitated person's assets. An aged or ill person may demonstrate erratic behavior or make irrational decisions or is unable to make any decisions at all. At that point, loved ones will be forced to petition to have that one adjudicated as being legally incapacitated.

Conservatorship, then, is essentially a public declaration of an individual's incompetence A Durable Power of Attorney (DPA) may help avoid the conservatorship process. But, powers of attorney bestowed upon a DPA agent can be easily controlled or even terminated by any court-appointed conservator. The reason is that the DPA agent was never "titled" the property (as the trustee of a trust would be) that he is supposed to control. Moreover, DPAs do not operate under contract law, which is why they are limited in functionality. However, a fully funded living trust will normally avoid all conservatorship problems including the limitations of a stand-alone DPA arrangement.

The Operations of a Living Trust

In simple terms, a living trust is an agreement between the trustor (also called the settlor/grantor) and the trustee. The two agree to enter into a contract wherein the trustor transfers title of assets to the trustee so that s/he can manage, and eventually distribute, those assets on behalf of the beneficiaries of the trust. Remarkably, with a living trust, one person or a married couple can be (and wear the hats of) all three parties trustor, trustee, and beneficiary at the same time.

When the trustor/trustee dies, the successor trustee (originally appointed by the trustor) immediately assumes the office, title, and duties of the trustee without any outside approval or supervision. The ability of trustee succession to the title of assets occurs by operation of law through the legal, binding agreement of the trust. Unlike a will, probate court supervision is not required to accomplish the legal titling of assets to the successor trustee. After the death of the trustor, the trust becomes irrevocable meaning it cannot be altered or amended and the successor trustee will continue to manage, or immediately disperse, the trust assets to the beneficiaries per the instructions in the trust. It's that simple!

In our global economy, your financial heath can be threatened in unsuspected ways and from unsuspected places. Geopolitical events are now causing economic inconsistencies that were not present in years past. While frivolous lawsuits are still an ongoing concern and can quickly wipe out your nest egg, downturns in the stock market, divorce, tax authorities, currency devaluation, and the like, can devastate your life and well-being.

Issues of rights, lawsuits, estate planning, investments and taxes are some of the battles that we all face in wealth preservation. Winning the war only occurs when your business, your employment, your estate and your tax planning all flow together into a non-libelous and protected plan, with each asset being safely protected from every harm that may occur.

Using international structures in a tax compliant manner can help you invest, work, and money in a global economy.

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