Why you may need a revocable living trust.
You may also wish
to distribute gifts to young people over time (a common age for
distribution of gifts to young people is 25) or distribute gifts for
the benefit of elderly or vulnerable people who may be disabled or
have drug, alcohol, gambling or shopping addiction issues or be in
the midst of a divorce or bankruptcy. A Revocable Living Trust
used in conjunction with a Will can accomplish these goals. When you
create a Trust, you are the Trustor and the Trustee. This means
that you are giving your assets to yourself to be used for the
remainder of your life. After you pass, your Successor Trustee
administers your estate for the benefit of the beneficiaries you
name.
As a practical matter, this means that young people who go to expensive schools or remain in school longer, may use their inheritance faster than a child who does not go to college or has a scholarship, but each receives the same amount of money, just at different times according the circumstances. Sometimes a beneficiary will be quite a bit more affluent than other beneficiaries. In this case, it is not unusual for the better off beneficiary to disclaim the inheritance so that other beneficiaries receive a larger share.
There are also circumstances where a beneficiary may be inadvertently disinherited (a Trust makes this less likely). If that happens I encourage the beneficiary who is legally entitled to the gift to make it right and share with the omitted beneficiaries to preserve family harmony. A common way that inadvertent disinheritance occurs is a situation where, for example, there are two adult children listed as beneficiaries of a life insurance policy and each has two children of their own. If an adult child predeceases the parent who owns the policy, then the grandchildren of the predeceased beneficiary would not share in the proceeds because the surviving adult child would receive the whole gift. If the Trust was named as beneficiary, then the grandchildren would share equally in the predeceased parent's share of the life insurance proceeds.
Trusts can also help avoid the issue of a youthful beneficiary because if a beneficiary is 18 years old, that beneficiary is entitled to whatever share they are given. The Trust, if named as beneficiary, would allow the Successor Trustee to care for the beneficiary until distributing the balance of the funds at age 25.
Why unmarried couples especially need estate plans.
If you choose not to be legally married, you can contract for some of the same rigthts as married people in a manner that is much easier to change than divorce. Through your estate planning, you can give your significant other the right to handle financial and medical matters for you. This can be especially important if your partner is hospitalized and unable to communicate with health care providers.
Separate Property Trusts can be used in conjunction with pre-nuptial agreements to establish rights regarding separate property businesses or inheritance for example. Separate Property Trusts can be used to protect one partner from the other partner's creditors. Community Property Trusts can be used to contract for many community property rights in a way that protects partners in the event of untimely death, but is easy to amend or revoke if circumstances change. Generally, no probate is necessary for married couples or for couples who hold their real property and the majority of their estate in a Trust.
As a practical matter, this means that young people who go to expensive schools or remain in school longer, may use their inheritance faster than a child who does not go to college or has a scholarship, but each receives the same amount of money, just at different times according the circumstances. Sometimes a beneficiary will be quite a bit more affluent than other beneficiaries. In this case, it is not unusual for the better off beneficiary to disclaim the inheritance so that other beneficiaries receive a larger share.
There are also circumstances where a beneficiary may be inadvertently disinherited (a Trust makes this less likely). If that happens I encourage the beneficiary who is legally entitled to the gift to make it right and share with the omitted beneficiaries to preserve family harmony. A common way that inadvertent disinheritance occurs is a situation where, for example, there are two adult children listed as beneficiaries of a life insurance policy and each has two children of their own. If an adult child predeceases the parent who owns the policy, then the grandchildren of the predeceased beneficiary would not share in the proceeds because the surviving adult child would receive the whole gift. If the Trust was named as beneficiary, then the grandchildren would share equally in the predeceased parent's share of the life insurance proceeds.
Trusts can also help avoid the issue of a youthful beneficiary because if a beneficiary is 18 years old, that beneficiary is entitled to whatever share they are given. The Trust, if named as beneficiary, would allow the Successor Trustee to care for the beneficiary until distributing the balance of the funds at age 25.
Why unmarried couples especially need estate plans.
If you choose not to be legally married, you can contract for some of the same rigthts as married people in a manner that is much easier to change than divorce. Through your estate planning, you can give your significant other the right to handle financial and medical matters for you. This can be especially important if your partner is hospitalized and unable to communicate with health care providers.
Separate Property Trusts can be used in conjunction with pre-nuptial agreements to establish rights regarding separate property businesses or inheritance for example. Separate Property Trusts can be used to protect one partner from the other partner's creditors. Community Property Trusts can be used to contract for many community property rights in a way that protects partners in the event of untimely death, but is easy to amend or revoke if circumstances change. Generally, no probate is necessary for married couples or for couples who hold their real property and the majority of their estate in a Trust.
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Bellevue, WA 98006-1553
www.mulvaneylawoffices.com
Phone: 425-649-1190
Fax: 425-223-3197
chris@mulvaneylawoffices.com
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