704.717.4848

The TreeceCo Report

 

Originally Posted August 15, 2014

Greetings!

 

A couple of weeks ago I had a conversation with a woman who was really angry. Angry at what? Well, before I tell you the story, let me set it up for you.

If you decide to prepare a living trust, you need to transfer your property into the name of your living trust. For example, if your names are John and Mary Wilson, and you create a living trust called:

The Wilson Family Trust, dated__/__/__, with John and Mary Wilson as co-trustees of the Wilson Family Trust...then you need to make sure that the title of your house reflects the trust name on the deed.

Why you may ask? You must because the successor trustee of the trust (after you are gone) will not be able to manage any property that is not in the name of the trust. The same is true for any account you own, minus beneficiary accounts and IRA accounts. Understand?

So, let me put it this way. The trust is a legal document that basically gives the trustee, or the successor trustee full rights to manage assets for the purpose of transferring the assets. If the trust owns assets (meaning the name of the house is in the trust)... Then the trust is alive, hence, the name "Living Trust." However, if you have a living trust and the assets are not in the name of the trust, then you have nothing more than an expensive will. Ouch! So, with that said, let me get back to my story... The woman, I'll call her Gloria, was absolutely furious. Gloria's father prepared a living trust almost four years ago. He told the family not to worry. He did everything right (so he thought), paid an attorney in town to prepare his trust and the children should not concern themselves with a thing.

Okay, so why be concerned? Well, to make a long story short, Gloria's father died six months ago and she is the successor trustee. What that means is that she is responsible to make sure that all the assets are sold and split according to the directions of the trust. To her surprise, she went to sell her father's house, only to uncover the fact that the house was never put in her father's trust. Not really understanding the process, she dug a little deeper and discovered that she needed to initiate a probate court proceeding in order to liquidate the house and then transfer it into the trust. That's not even the sad part. What happened next was the part that really got Gloria upset. A little frustrated at this point, Gloria called the attorney to see if maybe there was some way to get around it or something she was missing. She informed him of the facts, and she almost had a heart attack at his response. He said, "Sorry to hear about the loss of your father, and sorry to hear about the probate, I tell you what, I will help you get through probate and I will even give you a discount." "A discount!" I thought she was going to go through the roof even six months after telling me this story.

Unfortunately this story did not end with a happy ending. Gloria is going to have to go through probate in order to get her father's name off the title and into the trust name. The bottom line to this was roughly six months and a little over $10,000 in court and attorney costs.

Why Probate You May Ask? Well, in an attempt to be fair, probate is the legal process that many people have to go through in order to make sure that a Will was prepared, validate the Will, notify creditors, pay debts and so on before any property is released to the beneficiaries. Even though many people want to make a case that probate is a cruel attempt at the government to "suck every last dime," it is just a system of checks and balances designed to protect the financial institutions and the interests of the deceased. However, here is the only problem... It often takes a long time and it can be really expensive. And no, there is no public grant for this, the money comes out of the deceased person's estate and the children are usually the ones who have to go through the probate process.

 

As a result, kids have to travel back and forth, take time off work and away from their families and go through a stressful process that quite frankly can be easily eliminated with a revocable living trust.

 

So, why am I telling you this? Mainly because most people, even after they get a trust, do not completely understand what it means to have their assets in the trust.

 

Or, get this! I've reviewed countless trusts and quite often... I find assets that are not listed in the trust name. It's not hard to figure out; you just need to know what to look for.

 

What's Your Concern? We all have different motivations for look into estate planning. What's yours?

 

  * Are you concerned about probate?

  * Are you concerned about estate taxes?

  * Are you worried that your family will fight and bicker?

  * Are you concerned about your family paying 6% - 10% of your total estate's gross in attorney's fees? What is your # 1 concern? 

 

I'm curious. Simply send me an email by responding to this email or call my office at 1-855.534.4653 and ask for Tony. I'd love to help.

 

Preparing today, 

Tony Treece

 

Disclaimer: The information contained in this email is provided "as is" with no warranties or  guarantees. This information should not be considered as actual legal, tax or investment  advice and you should always contact a certified

accountant, tax professional, or attorney before making any financial decisions.  While every attempt has been made to provide current and accurate information, neither the author nor the publisher can be held accountable for any errors or omissions.  
You agree that you are solely liable for any and all reliance, use, or action on this information.

 

Questions? Call 855.534.4653 or Email info@TreeceCo.com

Comment