What would happen if you and your spouse got into an accident and ended up unable to speak for yourselves, pay your bills, make your own investment decisions? What will happen to all the assets you've accumulated after you're gone? This is a "creepy" subject that most of us would rather ignore but that all of us must confront before we're unable. There are several ways to handle these matters, one of which is a Living Trust. You can assign Power Of Attorney to someone for your financial and health care decisions (in the event you become incapacitated). I'd recommend you have these documents even if you use a Living Trust as the basic document. One person told me the Power of Attorney is for while you're living and the Living Trust is for afterward. You can write a Last Will and Testament, use a Living Trust, or let-the-chips-fall once you're gone. I imagine most laws provide that the spouse gets everything but what if there is no spouse, or a divorced spouse? The next few paragraphs can help you have things happen the way you would like. Have fun! Here are some of the top-selling recent books on living trusts.
A Living Trust or Revocable Trust is a document that dictates how your business will be conducted upon your death (or incapacitation) and who is responsible for conducting your business. It usually contains your major assets, home, savings and investment accounts, automobiles, etc. As the "Trustor", you transfer title to these assets from your name to the name of your trust. You assign yourself as "Trustee" and then a list of alternate Trustee's to succeed you and manage your trust in the event you can't. You can change the assets, Trustees, even revoke your living trust at any time up until you are incapacitated and are unable to speak for yourself (as defined in your trust). Then, your first alternate Trustee takes over to manage your affairs, and so on, until your final expenses have been paid and remaining assets have been dispersed according to your wishes.
One of the biggest advantages of a Living Trust over a Will is Probate cost and time. When someone dies with only a Will, sometimes the entire estate is tied up for years in the legal process called Probate. That's where a Government attorney reviews the Will, gives people the opportunity to contest the Will, and, if uncontested, approves the estate to be dispersed within about 6 months. Even with no contests, probate can be very expensive in Government fees and legal expenses. The Living Trust does away with all that. Your Trust is drawn up, signed, assets transferred and, if no one contests the administration of the Trust, everything can be disbursed immediately after your death. When I was Trustee of my mother's Trust, because her assets were already liquid (to pay for assisted living), the estate was disbursed within 2 weeks of her death. This is an advantage that says you really love your loved ones, enough to make a hard time for them a little easier by removing the headache of Probate. Another advantage is having all the accounts in the name of the Trust, allowing your alternate Trustee to have access immediately (when needed) without being specifically named on the account. Another huge advantage is, because Trusts are simple to administer, family members and friends can be Trustees, rather than attorneys.
Conclusion at Living Trust Basics and Advantages-2
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