Re: Wills, Trusts, and Property
What are wills and trusts, what do they mean? A trust is widely considered the most innovative contribution to the English legal system. However a trust does not replace a will. In addition, more than 80% of people die without having a will. As a prospective paralegal working for your law firm it may be my duty to create wills and trusts.
Most trusts deal with life insurance or a piece of property. A trust will mainly split ownership in two titles, legal title, and equitable title. The holder of the legal title (Trustee) owns the property but only for the benefit of the one who holds equitable title (Beneficiary). Trusts can go into effect whenever the settlor wants it. Depending on the trust that is needed and what the client wants, it would be advisable to create a living trust, also called inter vivos trust. The living trust decides how the settlor wants his/her property to be used during their lifetime.
There are two types of living trusts, revocable living trusts and irrevocable living trusts. Revocable living trusts are the ones in which the settlor has the right to change, amend or eliminate the trust during his/her lifetime. Irrevocable living trusts cannot be revoked or changed by the settlor; they also have certain tax advantages that revocable living trusts do not. A revocable living trust would be recommendable when the settlor believes that he/she may want to change it in the future. A irrevocable living trust would be recommendable when the settlor believes that he/she may be mentally incapable of deciding for their estate after a couple of years.
Why a living trust? Here are some benefits of having a living trust.
• Avoid probate administration.
Probate in your own state has the benefit of quickly resolving creditor claims and providing a personal representative or executor with the authority to transfer and sell your property. Nevertheless, the process requires the assistance of an attorney and is known to be expensive and cumbersome in some cases.
• Provide for asset management while you are living but incapacitated and unable to manage for yourself. Your trustee, whom you have chosen, takes care of your property on your behalf without having to report to the courts or seek court permission as is required in guardianship.
• Sometimes, a living trust will avoid others knowing the content of your dispositive plans. However some states require the trust to be recorded to transfer real estate defeating the privacy aspect. No. It is a private document which unlike a will is not entered into public record. You should be aware that if you own any interest in real property, your deed should be filed as a matter of public record. However, this is the case with all real property, whether or not you place it in a revocable trust. Additionally, you may have to give copies of your trust to your banker, broker and others who are to deal with it.
A will is a document that represents the formal declaration of a person’s wishes on how their property is distributed upon his/her death. There are many types of wills like living wills, holographic wills, joint wills, nuncupative wills (oral wills), reciprocal wills (mutual wills), and statutory wills. Wills unlike trusts go into effect upon the death of the testator. Wills are always recommended. A living will is not a will it is a document that expresses a person’s desire to be allowed to die without being kept alive by artificial means. Any of the above mentioned wills may be created for a client as long as they comply with the laws of the state in which it is being executed. In Florida, a valid will per statutory requirements includes: (1) Who you are going to leave your assets to; (2) Who will care for (minor children) both financially and physically? (3) Who will administer your will? Aside from providing for the…