Trusts, and Living Trust Attorney

What is a trust?

A trust is a legal arrangement in which a person (called a “trustee”) manages and controls property given by another person (called a “grantor,” or sometimes a “trustor”) for the benefit of a third person (called a “beneficiary”). There are many different kinds of trusts and many different uses for them. Lets discuss one kind of trust called a “living trust”.

What is a living trust?

A living trust is a trust that goes into effect while the grantor is alive. (the grantor, once again, is the person who puts his or her property into the trust.) Often, a living trust is used as a form of estate planning - that is, as a way to manage property during the lifetime of the grantor and to provide for what will happen to any property that is left after the grantor’s death. Sometimes this is a good idea; sometimes it is a bad idea.

here is an example: Using the fictitious characters Karie, Kim and Ellen, lets look at a living trust. Karie creates a trust naming herself as trustee with Ellen as a successor trustee (to become trustee when Karie dies). Karie also names herself as beneficiary and names Kim as secondary beneficiary. She takes the legal steps necessary to transfer ownership of her property to the trust. During Karie’s lifetime, she uses the property in trust as she pleases. After her death, whatever is left is disposed of according to the terms of the trust instrument. The trust instrument says that when Karie dies the successor trustee is to manage the property held in trust for Kim’s benefit until Kim reaches the age of 30, and then to transfer all trust property to Kim. No probabte or other court proceeding should be required to transfer trust property after Karie’s death.

Advantages of a living will for Washington State resident:

Why would someone want to create a living trust? There are some situations in which living trusts may make good sense for Washington residents. Living trusts:

• May avoid a second probate for real property owned in another state. If real property is owned out of state, a living trust that holds that property can avoid the expense of a second (ancillary) probate in the other state.

• May offer greater privacy. Unlike a will, which is filed in court at the time of death and which then becomes a public record, a trust instrument is generally not filed in court. Thus a trust may offer more privacy to those concerned about the nature of their property or whom they wish to benefil.

• May offer the opportunity to observe trustee performance. A living trust may give the grantor a chance to observe the performance of a trustee and see if it is satisfactory. If the trustee’s performance is unsatisfactory, the grantor can make a change.

Possible disadvantages of a living trust, even when prepared by an experienced estate-planning attorney:

• High up front cost. The cost of drafting a living trust and re-titling one’s assets into the trust may be relatively high by comparison to the cost of a will and ordinary probate.

• Failure to fund the trust. Failure to transfer all assets to the trust before death may necessitate a probate for the assets left out of the trust. Thus, if probate avoidance were a main reason for creating the living trust, its purpose would be defeated and costs would be increased.

Living Trust Scams

The Opening Pitch “Do you want to leave a legacy for your grandchildren and not have the government take all the money you have spent a lifetime saving? Come to a free seminar to learn how.”

The Presentation you respond to such a mailer, phone call or advertisement by attending a workshop. Or you might call to find out about it and someone will come out to your home to present information. They will sign you up for a living trust by having you fill out forms that disclose all of your financial assets. Once they have seen your finances, they begin to recommend different investments, usually insurance type products like annuities, in order to earn high commissions off the sale of those products.

The Result Sometimes the living trust document you buy is not filled out properly because lawyers are not doing it. If these documents are filled out improperly, you may end up going through probate anyway, the very thing you were told you could avoid. In addition, many older people end up buying investments that are not appropriate for them given their situation.

The Law Washington law (http://app.leg.wa.gov/RCW/default.aspx?cite=19.295) protects consumers from trust mill scams by making it illegal for anyone other than an attorney or a professional employed by an attorney to market legal estate distribution documents such as living trusts and wills.

Avoid The Scam

If you want to know if a living trust is what will help you and your loved ones, you should get the advice of an estate-planning attorney. We offer a free phone consultation here at Brian Duce Attorney at Law, or come in anytime to schedule an appointment to sit down with us today.