At Wilson & Wilson Estate Planning and Elder Law LLC, we understand the importance of preserving the wealth you've worked hard to build for the benefit of your loved ones. That's why we advocate for the use of living trusts as a strategic tool to minimize the involvement of probate courts, thereby saving on potential legal fees and streamlining the distribution of your estate.
Probate can be a complex process, often involving the detailed inventorying and valuation of assets, settling outstanding debts and taxes, and ultimately transferring the remaining estate in line with the decedent's wishes as outlined in their will. By establishing a living trust, you provide your surviving family a pathway to bypass the probate process, allowing for the more immediate and cost-effective transfer of your assets to the beneficiaries of your choice.
A well-structured living trust can both expedite the transfer of assets and maintain privacy, as probate records are public. It offers a dual advantage: quick transition of ownership to beneficiaries and the reduction or elimination of probate court expenses. Should you be married, a single living trust can be crafted to manage both jointly owned and separate properties effectively.
The Steps to Establishing Your TrustTo set up a robust living trust, one begins by drafting a declaration of trust. This pivotal document functions much like a will—but with you appointed as the trustee, you retain control over your estate. If you're creating a trust with your spouse, both of you will serve as co-trustees.
Property ownership is then formally transferred to you in your capacity as trustee. For instance, your home may be deeded to yourself, now in the role of trustee, under the terms of the trust. This transfer of ownership doesn't mean relinquishing control—rather, it's a legal move that ensures smooth succession later on.
Within your declaration of trust, you'll specify the beneficiaries and outline their inheritance upon your passing. It's flexible, allowing you to revise beneficiary designations as needed or even revoke the trust entirely, should circumstances change.
Complementing your living trust with a will can safeguard any assets inadvertently left outside the trust, ensuring they reach your intended recipients rather than defaulting to state succession laws.
Tax Considerations and Ongoing AdministrationAfter establishing a revocable living trust, the maintenance involved is minimal, mostly centered around proper documentation during asset transfers.
For example, when Monica and David Fielding decided to sell the home held within their trust, they simply executed the property sale documents as trustees. This step ensured consistency and upheld the trust's initial purposes.
Tax reporting remains straightforward—the trust's income is reported on your individual tax return, so there's no need for a separate filing for the trust, as long as you're the grantor and the trustee.
Executing the Trust Post-MortemUpon your demise, the designated successor trustee steps in to transfer the ownership of the trust assets to your chosen beneficiaries. This typically requires minimal paperwork and can be concluded within a few weeks, freeing your loved ones from protracted probate procedures.
Professional Guidance in Trust CreationCrafting a living trust can be nearly as straightforward as writing a will. Those with relatively uncomplicated estates may consider using estate planning tools to construct a trust independently. However, for personalized advice and intricate estate structures, professional legal guidance is crucial.
At Wilson & Wilson Estate Planning and Elder Law LLC, we provide assistance in crafting living trusts tailored to your unique needs. Contact us today at (708) 482-7090 to schedule your Consultation and take the first step towards an estate plan that epitomizes efficiency, control, and peace of mind for you and your heirs.