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Why choose probate?

Most of us are familiar with the phrase--the only two things you cannot escape are death and taxes.

Since there are several ways to defer and work with tax issues, that leaves one concrete. The only thing we do not get out of is death. We may not know the date, time or how, but we can all be reasonably certain we will face death. We can all choose how to manage our assets now, and plan how we want them to be distributed after our demise.

For the past several years I have been studying wills and living trusts. I have read numerous books on trusts and wills. I have attended several seminars on them as well. It became clear to me that my choice would be to establish a living trust.

I am a person who prefers to do things independently. I say this tongue-in-cheek, because I have not always lived this way. Many times I made choices against that belief. To illustrate:

1. I am not mechanically inclined, so I need to hire someone to help me with many things.

2. I prefer to spend my time with books, words and flowers, so cooking is not my forte. (I eat salad, stew or tuna sandwiches.)

3. I learned the necessary steps to begin, flounder, and finally continue my floral design business.

4. I tend to learn to do what needs to be done. (I petitioned, secured and completed all the documents involved in my divorce with my husband. We're still pretty good friends, by the way, so it must have gone well.)

These are some of my can-do's which led me to investigate wills and trusts.

Two basic differences have led me to choose a revocable living trust.

1. With a will, everything must go through probate. To distribute and process a will usually takes a minimum of one year, and quite often two or three years.

2. A will goes through probate, which is public. Anyone who wants can choose to read your will.

Only you, your inheritors, and the trustees of your trust know what is involved in the distribution of your estate with a trust.

This is true whether your estate is large or simply the dog and antique clock you want your cousin Sam to receive.

The Living Trust Revolution is based on the belief that you as an individual are capable of deciding who you want to inherit what, and capable of filling out simple forms to that effect.

Many lawyers encourage people to make a will. Often these lawyers will charge only a small fee for doing that. But what they may not tell you is that they make their larger fees when your will needs to go through probate and they will settle it for 7-10% of your estate, or more! That 7-10% of your estate could have gone to your children or other heirs as it would if you had established a living trust.

After deciding exactly what I wanted done with my estate, I decided to test these truths I had been learning. I made an appointment with a lawyer. The first consultation (15-30 minutes) was free.

The entire time the lawyer tried to convince me to do a will instead of a trust. I could literally "feel" resistance to my desire to do a living revocable trust.

I had called several lawyers before settling on that one. Each of them seemed to have this resistance to preparing a living trust. Lawyers who do specialize in doing living trusts and who teach and write about them, will often tell you not to be surprised at this reaction. A lawyer may make $500 or more on a will or trust. But, if the same lawyer settles the estate through probate, he stands to make a much larger profit.

Why would anyone choose to go through probate? The dictionary defines probate as "judicial determination of the validity of a will." I do not need a judge to validate my intents and purposes.

There are many great books, CDs and seminars on establishing a living trust.

One important item to remember is to establish a living revocable trust, not an irrevocable trust. Revocable living trusts can be changed or canceled, an irrevocable trust cannot. This could have disastrous results in many ways.

Revocable living trusts are legal in all 50 states. They can be changed or amended after they are established, or even revoked.

In all honesty, there is a little more paperwork in establishing a living trust. But whether single or married, having children or not, a trust exists to meet your needs and the needs of your family without court interference.

It is not necessary to maintain separate tax records for your living trust. Because you name yourself or yourself and your spouse as the trustee or grantors of the trust, transactions made by your living trust are reported on your personal income tax returns.

While you are alive, you keep ownership of all properties that you have transferred to your living trust. The trust becomes operational fulfilling your wishes--without probate--after you die.

After your death, the revocable living trust allows your property to be transferred--privately and outside of probate--to your named beneficiaries.

In a revocable living trust you must name yourself as the grantor and also as the trustee to manage your property; You need to also name a successor trustee to take over after you become incapacitated or die.

I am a simple lay person who believes it is possible to accept responsibility to make and execute plans to establish my own wishes.

Before choosing a will, it is wise to investigate the option of a living trust.

Plans and future care of children can also be provided for in a revocable living trust, whether married or single.

If in investigating a trust, finances are a concern (aren't they for most of us?), all of your studying can be done through your local library. Some excellent books are, The Loving Trust, which is written by two lawyers for their families, and 8 Ways to Avoid Probate. My personal favorite is Make Your Own Living Trust, by attorney Denis Clifford. It includes forms that. can be copied and filled out by you.

After completing a living trust, I have also filled out a basic will which will cover anything that I have not put in my trust. It will have to go through probate, but it Can list such things that are in process but not completed should I die before they are through.

It is extremely important to remember that a living trust is not legal unless you have transferred all of your property into it. As I said earlier, it does take a bit more paperwork. (It is like buying three bushels of peaches to eat. If I do not can or prepare the fruit, quite possibly I could lose it all.) If I establish a living trust, I must transfer my property into my trust to make it functional.

There are many sources to assist you with a living trust. Be wise and discern that which applies to you and your family. If you choose to establish a more complicated style of trust, consult a lawyer for any questions.

Legal information is available 24 hour a day from www.nolo.com. You may also call 1-800-728-3555 for a source listing of help or fax 1-800-645-0895. The Nolo group may be contacted at: Nolo, 950 Parker St., Berkeley, CA 94710.

Revocable living trusts give you the reins to harness your estate into the future and avoid throwing money away on probate.

LINDA HARRIS

IN GREEN PASTURES

WISCONSIN
COPYRIGHT 2004 Countryside Publications Ltd.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2004 Gale, Cengage Learning. All rights reserved.

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Title Annotation:Homestead finances
Author:Harris, Linda
Publication:Countryside & Small Stock Journal
Date:Jan 1, 2004
Words:1281
Previous Article:Retirement success: how do you know?
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