Tuesday, February 21, 2017

Do I Really Need a Trust or is a Will Enough?  


We get a lot of questions from our clients about whether or not they really need a Revocable Trust or whether a Will, a simpler legal document, is enough. Trusts are an increasingly popular estate-planning tool for a number of reasons. Trusts are private while a Will is a public document, available to anyone who wants to search public records. If your privacy is important to you, you want a Living Trust.

Let’s look at the case of the late North Carolina basketball coach Dean Smith

Smith died in 2015 and left $200 each to an estimated 180 players he’d coached over the course of his 36-year career. The small payouts come from his Revocable Living Trust—not a Will. Smith had set this up because he didn’t want attention on himself; rather, it was about his players, as it had always been. Coaching and mentoring young men, including Michael Jordan and James Worthy, was his legacy, and he was widely admired not just for his winning record but for running a consistently clean program with a high graduation rate; an estimated 97% of his athletes received degrees. Smith also helped promote desegregation by recruiting the university’s first African-American scholarship basketball player and pushing for equal treatment for African Americans by local businesses.

For Smith, each of his players was special and important

Each of Smith’s players who lettered received a check for $200 and a letter, suggesting he “enjoy a dinner out, compliments of Coach Dean Smith.” Because this was set up as part of a Revocable Trust, each transaction was completely private; it only became public when former players posted their letters and checks on social media and they went viral.

Other advantages of a Living Trust

  • Revocable means that if you change your mind and want to dissolve the Trust at some point, you can do so without a problem or penalty.
  • Assets that you transfer into the Trust don’t go through Probate when you die. Without a Living Trust, your heirs must go through Probate, and your Estate becomes a matter of public record. Probate can be time-consuming and expensive.
  • Many of our clients are concerned that they will have forgotten to include some of their assets in their Living Trusts. For this purpose, there is a safety net that California Document Preparers includes in our Living Trust package called a Pour Over Will. It essentially transfers any remaining assets or property not previously transferred into the Trust—they “pour over” into the Trust so they may be distributed according to the terms of the Trust.
  • As part of our comprehensive Living Trust package, we also include a Power of Attorney and Advance Healthcare Directive. We want our clients to be thinking about the full range of end-of-life document requirements and needs. Whom would you appoint to make healthcare decisions for you if you were no longer able to make these decisions for yourself and who is the best person to help with paying bills and managing your everyday needs.
One more thing: A Living Trust is meaningless if it’s not funded—your assets, including real property, must be moved into your Trust. Your Trust should also be updated with important life events—births, deaths and important investments.
Are you still putting off creating or updating your Living TrustWe prepare the legal documents and notarize them–most of our clients tell us they’re surprised at just how easy it was! Make an appointment today to get started on your Trust.

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