Occasionally, folks come into the office wanting a living trust because they “hear” (usually from friends) that the living trust does this or that. Some of the time, what they have to say is correct – a living trust does have benefits over a simple will. Let’s discuss what those are.

1. Living Trusts Are Completely Revocable. One of the primary goals that clients have for their estate plan is that the plan must allow them to maintain control and flexibility during their lifetime. Living trusts can be changed at any time during the person’s life. You can revoke it entirely, amend some portions of the trust, if you like – all without disturbing the protections it affords in cases of disability or death. While you can change a will during your life time, each execution of the will has to be carefully done or else it risks noncompliance with the court system.

2. Living Trusts Mean Your Estate Administration is Completely Private. When a person dies with just a will or “intestate” (without a will), it means that the courts have to get involved with the process. The will needs to be submitted to the Surrogate (here in NJ), who approves the will or doesn’t and issues powers to the executor called Letters of Administration or Letters Testamentary. This entire process is completely public. You know this to be true because of all of the reports of what celebrities have in their will and the challenges that can be raised to that will.

Compare that with a living trust. A living trust is a contract, which means, among other things, it’s entirely private. The public can’t find out who is named as a beneficiary of the trust or what assets are going where. That’s true for the regular public as well as a potential heir that has been “disinherited.” Unlike probate, where every document is public – a living trusts allows a person to plan their estate in privacy.

3. A Living Trust Is More Flexible Than A Will. Here, I’m really talking about the ability to add and remove assets from the trust during your lifetime. In addition, if you have a summer home in Florida or New York, leaving that property in a will likely means hiring an attorney in that state and paying the required fees to make the transfer. That can reduce the overall value of that property by 5% or more.

A living trust, on the other hand, allows the real estate to pass to your loved ones without that unnecessary travel and expense. Although there are grey areas when it comes to estate planning, I can say without a doubt that people with real estate in more than one state should absolutely have a living trust in place.

As you can see, a living trust offers significant advantages over a simple will. If you see yourself in one or more of these scenarios, you ought to visit with an estate planning attorney to learn about your options.

Posted by Victor J. Medina
Medina, Martinez & Castroll, LLC

When people learn that I am an estate planning attorney, I usually get asked this question: “Should I have a will or a living trust?” Then, conversation usually turns to what the prospective client heard could or would happen with one or the other. It’s as if I’m a surgeon and the patient is telling me what they “heard” were the advantages of using one stitching procedure over another.

I usually surprise them by telling them that they should get neither. You see, estate planning is not about the documents, it’s about the RESULTS.

Whether you have a will or a living trust doesn’t matter if the plan isn’t tailored to meet your goals!

Estate Planning Without Counselling? That’s Crazy

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here are a lot of estate planning attorneys in New Jersey. However, I’ll be brave enough to say that what passes for estate planning in America is little more than word processing. Estate planners, eager to engage a client, hear that a client wants “it” (whether “it” is a will or a living trust) and then proceeds to fill out one of three forms. However, without counselling (note the Old English spelling), that will or trust could be the wrong vehicle for that situation.

Let me ask a question: What do you think of a doctor who prescribes a drug simply because the patient saw a commercial on TV? Why should estate planning be any different?

Estate planning needs to be an ongoing process that centers on the client’s goals.

Here are 10 things you can do in 2007 to keep your estate planning on the right track.

1)    Last Will and Testament
Make sure you have an up-to-date, professionally-prepared Will and/or Living Trust.  Keep the original in a safe place and tell other people where that is.

2)    Title to Assets and Beneficiary Designations
Check your property ownership and beneficiary designations for life insurance, retirement accounts and other assets to ensure that they are coordinated with your will or trust provisions.

3)    Durable Power of Attorney
Prepare (or have an attorney prepare for you) a comprehensive Durable Power of Attorney.  Register it if necessary.

4)    Health Care Power of Attorney
Even if you don’t currently have a medical condition, prepare (or have an attorney prepare for you) a current Health Care Power of Attorney, valid in your state of residence.  Make sure your primary care doctor has a copy and make sure that others know where they can find a copy.

5)    Think About What Advanced Directives You Want and Document Them
Prepare (or have an attorney prepare for you) a current Living Will or Medical Directive that clearly and accurately states your wishes. Make sure your primary care doctor has a copy and make sure that other know where they can find a copy.

6)    Touch Base with your Fiduciaries
Make sure you have spoken to your Executors, Trustees, Agents (under a power of attorney), and Guardians named in your estate planning documents to ensure they agree to serve and are aware of your wishes and other necessary information, including the location of the documents and contact information for your attorney.

7)    Insurance
Review all of your policies, such as life/medical/disability/home/auto, to see if you have adequate coverage.  Consider upping the liability limits on your auto insurance and purchasing umbrella liability insurance.  Those of you with young children, make sure you have enough life insurance to cover expenses through college (and beyond if they have such graduate-level aspirations).  If you are reaching your senior years, take a look at long-term care insurance.

8)    Asset Protection
Here are few tips lines under one heading (don’t say I never give you anything….):

If you own rental real estate, place it in an LLC.

Avoid large joint accounts.

If you are getting married, talk to an attorney about the advisability of a prenuptial agreement.

Protection your children’s inheritances by keeping the assets in trust for them.

9)    Taxes
Though you may normally be a do-it-yourselfer, have a CPA or tax attorney review your return to ensure that you are making the most of your deductions and any tax breaks.  If your assets exceed $2 million (including face value of life insurance), make sure you have addressed estate taxes in your estate plan.  Do not give over $12,000 a year to anyone without seeking advice as to the gift tax consequences of the gift.

10)    Attorney

It doesn’t have to be our firm, but establish a relationship with an attorney whom you can trust and easily communicate.  In addition to making sure that they are competent to handle your matter, make sure that you enjoy working with them and move on if they don’t return your phone calls promptly or act annoyed to explain the details to you.

That’s it….get started and sleep better at night.