What to Know About a Living Trust

My mother fell ill, was hospitalized, and passed away within 10 days. On the 8th day of mother's hospitalization, the Trustee entered mother's home, took all her jewelry, removed mother's furniture including some valuable antiques, removed her china, crystal, sterling silver, linens and fur coats.

By the time I found out, it was all gone. It took only one day for her to hire a truck and moving all my mother's possessions. She didn't call, ask me, or make any attempt to treat my mother's things with respect.

I was hurt, angry and outraged. To make a long story short, I hired two attorneys: An estate attorney, and an estate attorney who specializes in Litigation.

The retainer was $7500 and invoices quickly climbed to over $35,000 before a year went by. It's now more, my credit cards are maxed out, and the new estimate from one of the attorney's is another $25,000. Where will it end? Plus, what was supposed to be settled in 90 days is still going on after TWO years. Is that crazy? At this rate, I would have been better off keeping quiet.

No one tells you about the humongous number of court date continuances, many motions and other legal proceedings that make the matter drag on and on. I wouldn't have believed it if I was not living it. I get the awful feeling that it may take several more years to get this resolved. If only mother knew.

This whole thing is ruining my life. It is impossible to make plans, to live without nightmares, to not cry, to have some peace so I can move on.

I think it would be easier to bite the bullet and settle this matter so I can live the rest of my life without this hanging over me. It's only money and I am willing to put my pride aside.

If you are faced with these options, best advice, is to get over your anger, swallow your pride, chalk it up to life. Do NOT get involved with lawyers and definitely do NOT get involved with the courts. You may end up spending as much money as you may have gained. But that's just me.

My advice is to create a Living Trust to protect your assets, no matter how small they seem to be. It is important to have a Living Trust these days. Next, be very careful who you choose to be in charge of your assets when you die.

My experience with the courts proves to me that Judges do whatever they want, and it is rarely what you expect. It rarely goes the way you think it should go. If you don't like what they decide, get ready to pay thousands more to appeal, and wait another couple of years.

Then, there is still no resolution. Oh no, it goes back to the Trial Judge. More waiting time and more legal costs.

The only thing to do is be absolutely sure when you write your Will or Living Trust, you choose the right Trustee. Choose a good person who you absolutely, positively trust with your money and property.

If you end up a beneficiary and something during the process of inheriting doesn't go smoothly, I highly recommend that you settle the matter with the offending party as quickly as you can. Even if you have to suck it up and forget it, it is a whole lot better than having your heart and body dragged through the legal process. For what? Is it really worth it? Not for me. I was seriously disillusioned when I thought a lawsuit was the answer.

The best thing is to get out of the legal system, so that I can get what my mother wanted me to have before I die.

The only people who make out are the lawyers. Ethics aside, I am not so sure they are not in it for their cut. I am getting a bit hesitant to believe what they say, because they have my money on their mind.

I know that the longer I wait to stop this insanity, the less money I'll have in my pocket. I believe in estate matters, no judge is going to let one side win all. No matter what the other person has done, equity rules.

If you are part of an estate lawsuit, settle it. Get out and stay out of the legal system.

If you have not yet protected your possessions and assets from the government, do it now. Get a Will or Living Trust set up as soon as possible.

A Will and a Living Trust are both legal documents that when properly executed according to State guidelines dictate who of your heirs gets what. States vary in regard to what the legal requirements are, so be sure to find out what the requirements in your State.

You can name heirs, omit heirs, and leave everything to your dog if you want to.

Some people hire an attorney to prepare their Will document. But anyone can write their own Will. Generally, a Will must be notarized, but check with the legal requirements of your State.

A Will is a piece of paper that basically says I give all the money in my savings account to my daughter; I give my house to my son; and give my sister $X money from my checking account.

Wills are on the way out in most States and Countries as the preferred document to pass assets to beneficiaries, because of two main reasons:

1) Probate
2) No Probate Needed

Probate is a court process, which determines a lot of things in regard to your assets and what your wishes are. Questions are answered such as what you own or what property and money are part of your estate. The value and distribution of your property after you die is investigated by the Court to insure that what you want happens.

Yes, the Court takes a slice of your estate pie for their services.

Three other issues are more reason that people today prefer a LIving Trust over a Will:

1) How long it takes to probate a Will
2) Legal costs of probating a Will
3) Taxes

A Living Trust, on the other hand, is used for the same purposes, but different from a Will:

1) Allows beneficiaries to skip Probate
2) Beneficiaries avoid legal costs
3) Beneficiaries avoid taxes

Most people today write what's called a Pour-Over Will that says I give everything I have to my Living Trust.

Some people hire an attorney to prepare their Living Trust document. But a Living Trust is also a document that you can write yourself. Generally, a Living Trust document like a Will must be notarized, but check with the legal requirements of your State.

A Living Trust is written on several pieces of paper that says much the same thing as a Will, with a few very big and important exceptions.

A Living Trust does not go through Probate and does not incur costs of Probate. There are no taxes to be paid. The reason for this tax avoidance is that this document lives on beyond you. In essence, it is a living entity and does not die.

It helps to understand the types of players involved in the process of bequeathing your assets to people who you want to inherit one thing or the other to after your death:

1) Players under a Will are: Executor and Beneficiaries.

2) A Living Trust has three main players: Trustor, Trustee, and Beneficiaries.

An Executor of Your Will, and The Trustee of your Living Trust, both play much the same role in managing your estate. There are differences.

1) Executor of the Will: An Executor is basically in charge of your assets after you pass. The Executor carries out your wishes. Wishes you wrote down in your Will, but and this is a big but, with large estates, it's the court, not the family member or Executor, that controls of your assets.

Even though you name an Executor of your Will, your Executor must follow the Court and get approval prior to acting on your behalf if your estate is valued over a certain amount, typically a million dollars.

For a smaller estate, the Executor is unsupervised in carrying out your wishes. If the Executor does not follow your wishes or the intent of your wishes, there is little beneficiaries can do about it, except bring a lawsuit.

2) Beneficiary: A beneficiary can be one or more persons who inherit your assets when you die.

A Living Trust is a piece of paper that sets YOU up as Trustor and the Trustee, and identifies the beneficiaries who you want to inherit your assets.

1) The Trustor is the person who sets up the Trust.

2) A Trustee, usually also you, manages it. Trustees can add and withdraw money, invest and remove assets as per the language of the Trust that you set up in the first place.

3) Beneficiary can be one or more persons who inherit from the Trust after you die.

The Trust is governed by terms that you (Trustor) write down. Terms of the trust specify what assets are to be transferred into the trust, and who the beneficiaries will be of that trust.

Assets of any sort may be held on Trust, real property, bank accounts, CDs, jewelry, the dog, but growth assets are more commonly placed into Trust (for tax and estate planning benefits).

The use of trusts are many and varied. The Trustee is obliged to administer the trust in accordance with both the terms of the trust and the governing law.

The difference is ownership. Under a Will, you own your assets and bequeath it to your heirs. Period. That's it. Depending on the State and its rules, the Probate Court overseas takes possession of your assets and overseas that your wishes are carried.

Depending on the States's rules, and the amount of your estate, there may be taxes to be paid. These taxes are generally paid out of the estate's money prior to distribution to the heirs you named in your Will.

On the other hand, if you leave a LIving Trust to govern your assets after you die, then the Probate Court is not involved.

Ownership in this case is the Trustor, YOU. You would name yourself Trustee and also name an alternate Trustee who will manage your estate after you pass.

What it means to appoint a Trustee and naming your Trustee, YOU.

Once you write a Living Trust document and have it properly notarized, it is alive. Next, you assign assets to your Trust. Think of the Trust like a cigar box. The box is empty unless you deliberately put things into the box, otherwise the Trust is an empty box per se.

Once you put your home, for example, into the Trust, it is no longer yours. It now belongs to the Trust. But because you appoint yourself Trustee, you have control over the property. It's the same as if it was still legally yours as before, but now, since the Trust owns it and you are the Trustee, you still have all the power over your house even though the Trust now owns it.

I know this sounds complicated. The reason most people want to assign ownership of an asset to their Trust is because when you die, the Trust lives on. It can be managed a number of ways by the beneficiaries because in essence they own it too.

Many people today write their own Trust to save on attorney's fees. It's up to you to decide whether to engage the services of an attorney or opt for the do-it-yourself method.

Between the Internet and many wonderful books, there are many places to find help.

You may want to hire an attorney if your estate is valued at a million dollars. But if the net value of your real property together with any investment earnings and cash in CDs, checking and savings account are less than several hundred thousand dollars, you feel comfortable writing your own Living Trust document.

One thing is NEVER give anyone power of attorney. You could lose everything. Even if you trust this person, the only thing you can do to get your property back is file a lawsuit. If your assets are gone, even if you win, there is nothing left to collect on.

Before you decide to prepare your Last Will & Testament, Living Trust or give someone your power of attorney, at the very least, get a book on Living Trusts and educate yourself.