Why
some persons create Trusts in addition to Wills
Probate is defined as the procedure by which an
Executor proceeds to admit a Will to the jurisdiction of the Surrogate Court,
which is proved to be valid or invalid. The term generally includes all matters
relating to the administration of estates.
There are instances where Surrogate Court monitoring
of the estate is desirable. Much has been written about the disadvantages of
probate.
Following are just a few of the problems associated with probate.
Lack Of Privacy
Documents filed with the Surrogate Court are public
information. They are available for inspection to anyone who asks. In large
estates, which require an accounting, your probate file will contain a complete
list of all assets devised by your Will including business assets. This lack of
privacy may lead to problems among family members who now know the plan of
distribution and may then contest any provisions with which they disagree.
Disinherited relatives and creditors are notified and given time by the Court
to contest the Will distribution.
Time Consuming
The probate of an estate may take several months to
several years to complete. During that time family members may have to apply to
the Surrogate Court for an allowance.
WHY SOME PEOPLE SPEND OVER $3,000 TO CREATE REVOCABLE LIVING TRUSTS
Fragmentation - Real Estate
If you own real property in more than one state,
probate rules must be followed in each state in which real property is located.
The cost and time may be increased.
A Revocable Living Trust is a legal device that
allows you to maintain complete control over your assets and AVOIDS PROBATE.
Because there is no probate of a Living Trust, your private financial matters
remain private; there are no probate costs, no long delays and loss of control,
and no fragmentation of the estate.
You Maintain Complete Control Over Your Property In Trust If Revocable
The principle behind a Revocable Living Trust is
simple. When you establish a Living Trust, you transfer all your property into
the Trust, and then name yourself as trustee, or you can name you and your
spouse as co-trustees of the Trust.
The trustees maintain complete control over the
property, the same control you had before your property was placed in trust You
can buy, sell, borrow, pledge, or collateralize the trust property. You can
even discontinue the Trust if you choose. That is why it is called a
"Revocable" Living Trust. We will explain the "Irrevocable
Trust" at the end of the article.
Transferring Property Into The Trust
The transfer of title to property into the Trust is
a relatively simple matter. Anywhere you have assets, you will get help in
transferring your property into the Trust. Your attorney, securities investor,
etc., will provide you with assistance needed to transfer your property into
your Revocable Living Trust. Your attorney will provide all the information and
assistance you need to properly fund your Trust.
Complete Privacy
Probate records are public; your Revocable Trust
documents are private. A Revocable Living Trust will safeguard the privacy of
your family and your private financial matters.
Naming A Trustee
Most people name themselves and their spouse as the
initial Trustees of their Trust. This is usually true unless one spouse is
incapacitated to the point that he or she is not able to manage your assets in
the same way you do now.
Gifts To Religious And Charitable
Organizations
Many people wish to give a portion or sometimes all
of their assets to a religious or charitable organization in order to carry on
the work of those organizations that have given them comfort or peace of mind
during their lifetimes. This is easily accomplished with a Revocable Living
Trust.
Marital Tax Deductions
A Revocable Living Trust can easily be structured to
automatically create separate Trusts upon the death of either your spouse.
Here's how it works. If the wife dies first, the husband has total control of
his Trust. Also, for the remainder of his life, he receives all income from her
Trust and has the use of the assets whenever needed for living expenses. When
he dies, each Trust will claim its tax exemption, and over $10 million will go
tax-free under Federal Law to their children, or any other beneficiary they
designate, without having to go through probate. NJ permits $675,000 without
estate tax.
