Normal power of attorney forms cease to function when you fall ill. This can throw your finances into disarray.
It is always essential to do some sort of tax planning for your estate. In fact, there are many documented incidents that resulted in one's heirs receiving only a small amount from the probate process due to the taxes and fee involved. Commonly the amount of inheritance tax (or death tax as it's sometimes called) can be 85 to 90 percent of the value of the inherited estate. In addition, the trust may pay a lower tax rate than the trustor, which creates an inherent financial savings. The same thing happened with the late Elvis Presley's estate. Taking this problem seriously can help ensure the same circumstances aren't faced by those you love.
Since we've established the need for a living trust, let's go over the basics to get you started. A living trust is considered one of the best ways to transfer the contents of your estate to another person (or legal entity). The person (or persons) who put their property or money into the trust is called the trustor or grantor. The trustee is the person that manages the assets and property contained in the trust. A trustor can name more than one trustee. Lastly, the person or persons who receive the benefits of the trust is called the beneficiary. To make things simpler, we are going to make the assumption that the trustor and trustee are the same person.
Most people say that the worst part about the probate process is the time necessary as well as the monetary costs. Even if you have a living will established, your estate will still proceed through the probate process. While there are several notable ways to avoid the probate process, establishing a living trust is by far the most common. Using a living trust can be an efficient way to avoid the delays associated with probate. Establishing a coherent and comprehensive life insurance policy is also helpful, but won't be covered in detail in this article.
In the past, establishing a living trust was known as a large hassle. One would need to locate an attorney that was experienced in estate planning that could draft a living trust based on your family's situation. Clearly, that could be an expensive proposition since most (if not all) attorneys charge their clients hourly. Thanks to technological advancements such as the Internet performing the research necessary to prepare a successful living trust is possible to the common person. Finding the forms necessary, as well as information on getting the forms properly filed can be obtained with a few simple searches in a search engine such as Google.
If you don't feel comfortable establishing the trust on your own, there are also companies that will help you with the process without charging as much as a single attorney. These types of websites can offer counseling services that can provide you and your family the information necessary without doing all of the work within the process.