Online Wills and Trusts

Aren’t all online wills and trusts the same?

No. Wills and Trusts will vary depending upon who drafted the document, and this directly impacts the trust’s quality. As an example: to create a trust, many attorneys will use software (trust mills) that give good documents but are coupled with the hourly costs of the attorney. Most online providers use basic, “starting point” language which leads to estate planning gaps, omissions, and liabilities. CompleteMyEstatePlan.com has expert legal professionals put together the best documents available and constantly update them to protect you and your family.

Are living trusts new?

No. Living trusts date back 1,200 years and have been used successfully by millions of people. American adopted English common law and with it the concept of living trusts. Our probate system was also taken from this system but many people try to avoid probate at all costs. See some of our posts regarding how to avoid probate.

Are living trusts expensive?

Not when compared to costs of land trusts, incapacity hearings, probate, and estate challenges. There is a large spectrum of quality of online trusts. Many online providers only give the basics making the process not worthwhile. CompleteMyEstatePlan makes sure you have all the protections available in your estate plan while keeping the lowest online cost to you.

Who should have a living trust?

It's really not a matter of how much you own. Whether you are married or single, young or old, have a modest or substantial estate, almost everyone can benefit from the peace of mind a living trust gives you, your family, and your loved ones. While not all estate plans contain protective provisions, CompleteMyEstatePlan ensures your documents will have every protection available for you and your family.

Attorneys say I shouldn't draft my own trust?

Attorneys need to protect their business. Technology, Artificial Intelligence, and the Internet, while providing a invaluable and inexpensive resource for the consumer, is a direct threat to brick & mortar estate planning attorney. Create your online Will or Trust today!

What types of trusts are there?

Here are some of the basic types of trusts:

Living Trust

• A revocable trust established during the settlor’s lifetime is commonly referred to as a living trust, less commonly as an inter vivos trust. A common form of living trust is the self-declaration trust, wherein the settlor names himself as trustee. A living trust is typically created for one or more of the following reasons:

  
  

• The living trust is amendable and revocable any time during the competency of the grantor by a statement signed by the settlor. There is no need to comply with the formalities used in signing and witnessing a will.

  
  

• Should the settlor become physically or mentally incompetent, the living trust can serve as the vehicle for the continuing management of his assets. There will be no need for appointment of a guardian of the estate, supervision of the probate court, or creation of a public record, assuming all of the settlor’s assets have been placed in the trust.

  
  

• The living trust is also superior to the appointment of a guardian of the estate in those situations in which a nonresident individual trustee or successor trustee is used, since the trust allows for his functioning during the incompetency of the grantor, whereas the same individual would not be able to act as guardian of the estate.

  
  

• Because a living trust can validly dispose of property upon the settlor’s death, the trust corpus is not subject to post-mortem probate proceedings, thereby avoiding court supervision and public scrutiny. Unlike a will, a trust does not become a matter of public record, thus preserving the privacy of the settlor’s dispositive plan.

  
  

• As a practical matter there seems to be a far lower percentage of suits contesting living trusts than contesting wills. The notice requirement of the probate proceeding and the attendant publicity encourages such suits. Also, a will contest must be brought within six months of the issuance of letters, whereas an action to set aside a trust may be brought within two to five years of settlor’s death unless the trust is receiving a pour-over from a will, in which case the six-month limitation applies.

  
  

• Upon settlor’s death, a trust is much easier to administer because the assets are already a part of the trust and do not need to be collected and transferred.

  
  

• The funded living trust also may be useful as naming of that person as a cotrustee will allow the grantor to supervise the trustee, train him in the management of the investment portfolio, and evaluate the appropriateness of that trustee’s continuing to function following the settlor’s death.

Insurance Trust

Virtually any type of trust can be designated as the beneficiary of a life insurance policy. However, a popular estate planning technique when a funded living trust is unnecessary is to use the revocable unfunded insurance trust.

To the extent the trust beneficiaries were dependent on the insured, insurance proceeds payable to a trust are free from the claims of creditors, except as to premiums paid in fraud of those creditors.

Testamentary Trust

The testamentary trust is another method of establishing postmortem management of the testator’s assets. It is amended or revoked by amending or revoking the will in which it is created.

The testamentary trust provides a receptacle for all probate assets not otherwise disposed of in the will. It should be noted, however, that the testamentary trustee will be delayed in collecting policy proceeds until the will has been proved up in the probate court, in contrast to the trustee of a living trust who is typically able to make immediate application for the proceeds.

The testamentary trust does not offer lifetime management of assets, privacy of dispositive provisions, or ease of execution. It also does not offer the probate avoidance that is accomplished by a trust.

My tax accountant says I have to use a separate tax identification number and file a separate income tax return for my Living Trust. Is this true?

No, not for a Living Trust while it remains revocable. A Living Trust is a Trust that is created while you are living. And there are two kinds of Living Trusts - a revocable Living Trust (which can be changed or canceled at any time) and an irrevocable Living Trust (which cannot be changed once the document has been signed, such as a life insurance Trust or a charitable remainder Trust).

Because the IRS considers an irrevocable Living Trust to be a separate entity from the person who sets up the Trust, it does require a separate tax identification number and a separate tax return. However, because a revocable Living Trust can be changed or canceled by the grantor at any time, it does not have to meet the same requirements as an irrevocable Trust.

If you are married, as long as you and your spouse are the grantors of your revocable Living Trust, at least one of you is a Trustee or co-Trustee, and you file a joint income tax return, you do not need to file a separate tax return or have a separate tax identification number. You simply continue to use your social security number as the tax identification number (just as you have in the past) and you continue to file your regular joint income tax return. If you have an A-B (or an A-B-C) Living Trust, when one spouse dies Trust B (and Trust C) become irrevocable. So, then a separate tax identification number and tax return will be required for that irrevocable Trust.

Do I have to register my Living Trust with the state?

No, Living Trusts do not have to be registered with the state you reside in.

Does the Trustee have to reside in the state where the Living Trust is to be settled?

None of the fifty states require that a Trustee be a resident of the state.

Who decides if I am physically or mentally incapacitated for my backup Trustee to take over?

Actually you do-when you set up your Trust. Your Trust will specify how many and what kind of doctors need to examine you and verify your capacity to manage your business affairs. This can be as stringent or as lenient as you want to make it. For example, you may require only a statement from your family doctor; additional concurring statements from one or more specialists; or an objective second or third opinion from an M. D. You can also list the doctors by name (this prevents any kind of "conspiracy" by unscrupulous relatives to have you declared incompetent).

Can a successor Trustee make changes to my Living Trust?

No, your successor Trustee cannot make changes to your Living Trust. Upon your death (if you are single), or upon the death of both spouses (if you are married), the right to change any part of the Living Trust ceases. The successor Trustee is under a fiduciary duty to carry out every instruction within the Trust.

Is a successor Trustee personally liable for the debt of a Living Trust?

No, a successor Trustee is not personally liable for the debt of a Living Trust. A creditor has a claim solely against the assets of the Trust, not against the Trustees of a Trust.

Can the surviving spouse change the successor Trustee(s)?

Unless the Living Trust specifies otherwise, a surviving spouse may change the successor Trustees.

Does a Living Trust protect my assets from my creditors?

No, a Living Trust does not shield your assets from creditors. However, unlike probate, the death of a person who created a Living Trust does not trigger a requirement that any debts or liabilities be satisfied or accelerated.