Essential Legal Planning

06/20/2024

https://www.essentiallegalplanning.com/2024/06/20/bidens-new-actions-to-keep-families-together/

At Essential Legal Planning (“ELP”), we understand the complexities and challenges of immigration laws and policies. We are committed to staying updated with

03/27/2024

Grateful for the chance to share insights on estate planning at The Duncan Library! Thank you to all who joined us!

02/15/2022

What are the disadvantages of a revocable living trust?

No court oversight - If there are concerns over intrafamily suspicions and feuds, or if there may be discomfort of a family member acting as a successor trustee to wind up the affairs of a deceased family member, then judicial oversight may not be a bad idea. No distribution to the beneficiaries can be made without the probate court’s approval, which requires the personal representative’s/administrator’s detailed accounting to be provided to the court.

Higher “start-up” costs - because revocable living trusts are complex documents, attorney’s fees are higher for a revocable living trust than a simple will. However, as mentioned above, your beneficiaries will save on the probate fee (and attorney’s fees) when going through the probate process.

Hassle - For the revocable living trust to be effective, your property has to actually be transferring into the trust. This involves contacting banks or financial institutions, insurance companies, qualified retirement plan administrators, and for real property, your mortgage company and registrar of deeds.

02/15/2022

What are the advantages of a revocable living trust?

Flexibility - The revocable living trust can provide a flexible mechanism for managing assets should a person become incompetent or has diminished capabilities.

Avoid probate - probate is a judicial process where a will is reviewed (typically) by a judge to determine whether it is valid and authentic. The court then appoints either the executor/personal representative named in the will, or an administrator (if there is no will) to help distribute the deceased person’s assets to the beneficiaries. If the deceased person’s assets are in a trust, the property does not need to go through probate because the successor trustee can distribute the trust property to the beneficiaries according to the terms and conditions of the trust.

Avoiding probate tax - probate court charges a fee to administer a will. For example, in Maryland, a $1,500 fee is assessed on a $1 million probate estate. In Virginia, that fee is around $1,330. Since a revocable living trust does not need to go through probate, your estate will not need to pay the probate court’s fees.

Avoid guardianship - A revocable living trust generally owns all of the grantor's property and can reduce or eliminate the need to initiate guardianship of the property for managing a disabled person's (i.e. grantor’s) property.

Privacy - unlike a will, a revocable living trust is a private document. A will on the other hand has to go through probate, which is a public process. This means anyone can review all assets owned by the decedent, accounting of the estate assets, and income & expenses of the decedent’s estate. If privacy is important to you, you should consider creating a revocable living trust.

02/15/2022

Revocable Living Trusts Explained

A revocable living trust is an agreement between the grantor (the person creating the trust) and the trustee to manage the trust property for the benefit of the beneficiary (usually the same person - the grantor). When the grantor transfers property to the trust, the trustee becomes the legal “owner” of the property, and must manage property in accordance with the terms and conditions of the trust. A successor trustee (usually a spouse or a child) is also named to take over the trust in the event the trustee becomes disabled or dies.

For example - you, the grantor, create a trust and place your home in the trust. You’ll need to change the deed from your name to “the Trust of ###.” The home is now owed by your trust and you are the trustee. In your trust you designated your son as the successor trustee. In the trust, you state that in the event of your death or if you become incapacitated or disabled, your successor trustee (i.e. your son) will manage the property. We can help craft the terms on how your successor trustee is to manage the property.