Death of the Living Trust Greatly Exaggerated! How You Can Still Benefit from a Living Trust
After the premature news of his passing, writer Mark Twain was once purported to have said: “Reports of my death have been greatly exaggerated.” Lately I have read several articles on the death of living trust based planning for all but the super wealthy. I would echo Twain’s sentiments and state that the reports of the death of the living trust have been greatly exaggerated. While the higher estate tax exemption amount and the dawn of portability have made the estate tax a non-factor for many individuals and couples, the usefulness of living trust based plans was never solely about estate taxes and most of the benefits continue unabated.A good living trust based estate plan should address four basic questions:1. How are our assets held and managed when we are alive and well? A well drafted living trust will allow you to continue to own and manage your assets without interference while you are alive and well.2. How will our assets be held and managed if we are incapacitated? A well drafted living trust will provide for a management plan if you are alive but unable to manage your own affairs because of incapacity. This will allow families to avoid the expensive and sometimes painful guardianship/conservatorship process – sometimes referred to as a living probate.3. How will our assets be held and managed when the first spouse passes away? A well drafted living trust will address what happens when the first spouse passes away. Will the spouse have free and uninterrupted use of the assets or will there be some limitations? Do you want to plan for the possibility of re-marriage?4. How will our assets be held and managed when we are both gone? A well drafted living trust will address the orderly disposition of your estate outside of probate when the second spouse dies. Will distribution be outright to the children or others or will it remain in trust? Will there be protections for minors, special needs children, or beneficiaries who may be likely to squander or lose their inheritance?A Will is purely a death instrument and is only effective upon death and after probate. A living trust is effective throughout your life and following death. A living trust allows you to avoid guardianship/conservatorship proceedings while you are alive and probate at death. So, while for many estate taxes are less of a factor than they were in the past, the benefits of a living trust as part of your estate plan continues.