Estate Planning
Living Trusts (also called Management Trusts) are revocable legal documents that, like a will, specify who is to handle your affairs after you die and who will receive your assets.
Unlike a will, however, a Living/Management Trust...
* Avoids the probate process for assets contained in the trust.
* Contains instructions on handling your affairs such as paying bills, investing, etc. in case of incapacity.
* May include language that will eliminate or reduce estate taxes for your heirs.
* Is revocable and changeable (unless you become incapacitated or pass away).
Revocable Living/Management Trusts have a variety of other key benefits including...
* Creates peace of mind for you and your family.
* Gives maximum privacy.
* Lets you keep assets in Trust until beneficiaries reach age(s) when you want them to receive their inheritances.
* Is more difficult than a will to protest.
* Can be amended or revoked at any time (prior to your incapacity).
* Can protect and direct care for dependents with special needs.
* Allows you to serve as your own trustee to keep maximum control while you are living... OR... in case of incapacity, you may choose to have easier, more efficient administration of your assets by Lutheran Foundation of the Southwest professionals.
* Minimizes emotional distress on your family upon your passing.
* Prevents court control of your assets at your physical or mental incapacity.
* Often speeds distribution of assets to beneficiaries, especially with smaller estates.
* Includes provisions for the accounting of income, paying bills and filing appropriate tax returns.
Living/Management Trusts provide many general benefits over wills, plus some very specific benefits if you are incapacitated or at death. Use these charts to compare the peace of mind a Living Trust offers versus a simple will.
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with a will... |
with a living/management trust... | |
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FLEXIBILITY & CONTROL |
Court procedures, not your family, have control at incapacity and death. When you die, limited assets are distributed per your Will (if valid and no contests are successful). Will can be changed until your incapacity. |
Maximum. You can change/discontinue Trust until incapacity. Assets stay under control of your Trust, even at incapacity and after your death. More difficult to contest than a will. |
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PRIVACY |
None. Court proceedings are public record. Many are on the Internet. Family can be exposed to disgruntled heirs, unscrupulous solicitors. |
Maximum. Living trusts are not public record. Your family can take care of your financial affairs privately. |
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MINOR CHILD/ COURT CONTROL |
Court controls inheritance, appoints guardian. All decisions and financial transactions require court approval. Child receives full inheritance at legal age. Children's trust in a Will provides limited protection, but the Will must be probated first and cannot go into effect at your incapacity. |
Minimal court control. LFSW manages inheritance and provides funds for expenses until children reach age(s) you specify. Court approved guardian, but cannot overrule your choice of Trustee and has no control over inheritance. |
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MINOR CHILD/ COURT & LEGAL COSTS |
Court and attorney usually involved until child reaches legal age. All costs are paid from child's inheritance, but may be less with children's trust in will. |
Minimal. |
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with a will... |
with a living/management trust... | |
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COURT CONTROL |
Court appointee (conservator/guardian) must keep detailed records, report to court, and usually post bond (even if appointee is your spouse). Court oversees financial affairs, approves all expenses. |
None. LFSW manages your financial affairs according to your instructions for as long as necessary. |
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COURT/LEGAL COSTS |
Court and attorney usually involved until you recover or die. |
No court costs. Minimal legal fees if attorney assistance is desired. |
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with a will... |
with a living/management trust... | |
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PROBATE |
Will must be probated, then debts paid and assets are distributed according to your will (if valid and no contests are successful). |
No probate. Debts are paid and assets distributed to Beneficiaries by LFSW according to your Trust's provisions. |
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COURT/LEGAL COSTS |
Your estate pays all court costs, legal and executor fees (often estimated at 3-8% or more of an estate's value). |
Usually none if there are no estate taxes, but an attorney can be helpful for larger estates. LFSW is entitled to a reasonable fee. |
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TIME |
Usually 9 months to 2 years before distribution. |
Just weeks in many states. |
Your LFSW consultant can answer any further questions you might have and develop specific illustrations for your personal estate planning needs and goals.
For a no-cost, no-obligation consultation in the privacy of your home, please complete the inquiry form on this website or call 1-800-424-0447.