Wills & TrustsA ComparisonHolt Community Education Jo Anne HindsThank you for joining us today! A few things to Attorney at Lawnote before we begin:The presentation and written materials providedtoday are intended for educational use only and donot constitute legal advice.While I encourage you to ask questions, pleasekeep in mind that you have no expectation ofprivacy or confidentiality in the information youmay choose to share in class.
Will Terminology A Will is formally known as a Last Will & Testament. If you are signing a Will, you are known as a Testator. The person you ask to settle your estate with a Will is known as the Personal Representative.
Trust Terminology A trust is governed by a Declaration & Agreement of Trust. If you are signing a Trust, you are known as a Settlor. The person you ask to settle your Trust is known as the Trustee.
Terminology ReviewLast Will & Testament Declaration & Agreement of TrustLast Will & Testament Declaration & Agreement of TrustTestator SettlorPersonal Representative Trustee
A Last Will & TestamentTells the Probate Court:- who you are- who your natural heirs are- who will raise your kids ifcannot- who should settle your estate- who should receive yourestate and how it should bedivided
A Well-Drafted TrustAgreement States:- who you are- who is responsible foradministering your trust- who receives your trustestate, at what time & forwhat purpose- anything else the trusteemight need to know to dohis or her job
Comparing by Cost Wills generally cost less to prepare, but much more to administer after death. Trusts generally cost more to prepare, but usually less to administer after death.
Costs with a Will Preparation – in many cases a will is easier to prepare, so attorney fees to prepare a will are less. Filing for safekeeping with court – current cost is $25 per will. Probate after death for typical estate - $150 filing fee, inventory fee of +/- $1000, certified copy fees, attorney fees ($2500 - $10,000 or more).
Costs with a Trust Preparation – attorney fees will be 3-4x higher, or more Trusts are not filed with the court for safekeeping, but can be registered (not common). Administration after death for typical trust – NO filing fee, NO inventory fee, NO certified copy fees, attorney fees ($0 - $10,000 or more, but generally much less than with probate).
Cost ReviewLast Will & Testament Declaration & Agreement of TrustAttorney Fees to Prepare Attorney Fees to PrepareGenerally Less Generally 3-4x More$150 Probate Court Filing NO Probate Court Filing FeeFee at Death$12 x ? Certified Copy Fees NO Certified Copy Fees+/- $1000 Court Inventory Fee NO Inventory FeeAttorney Fees to Administer Attorney Fees to AdministerGenerally Higher Generally Less
Purpose of a Simple Will Set forth evidence of competence. State burial/cremation wishes. Nominate personal representative. Nominate guardian and/or conservator for children who may be minors at parent’s death. Make gifts of cash/personal property. Direct payment of claims. State beneficiaries of remaining estate.
Purpose of Declaration &Agreement of Trust Confirm existence of trust. Confirm rights reserved. Nominate successor trustees. Set forth rules for using trust assets. Make gifts of cash/personal property. Direct payment of claims. Direct distribution of remaining trust, including contingent gifts.
Exclusive PurposesExclusive to Will Exclusive to TrustSetting forth evidence of Confirm existence of trustcompetenceStatement of burial/cremation Confirm rights reservedwishesNominate personal Nominate successor trusteesrepresentativeNominate guardian for minor Set forth rules for using trustchildren assets, including making contingent gifts
To create a Will, you’ll need to supply someinformation about yourself and your family.Some law firms will request that you complete a fill-in-the-blank form about your wishes.
A Trust Agreement Takes A Little Extra WorkYou’ll typically do more work to SET UP aTRUST than you would with a WILL.You’ll gather information about your assets, sothat your trust can be funded.
You may have to visit your banks, creditunions, and other financial institutions to“fund” or “transfer” your assets into yourtrust.
You can now do some of the work online.Be thorough. Double-check to make sureeach asset has been correctly funded to thetrust.
You don’t lose control over the assetsin your trust – in fact, with a typicalrevocable trust, you’ll be serving asyour own trustee for your competentlifetime.So… for example, when you gogrocery shopping, you are using yourpowers as trustee to expend trustfunds for your benefit.And there are no limits!
You can change banks orfinancial advisors, you may sellyour home and buy a new one –or even sell your home andtravel the world, spending everylast dime.Just because your assets areheld by a revocable trust doesn’trestrict your ability to do whatyou please with your assetsduring your lifetime.
If you are unable to care foryourself, your successortrustee may take over therole of administering thetrust for your benefit.
The Timeline IllustrationUnderstanding the Role of Potential Documents in Your Estate Plan Today Incapacity Death For this illustration, let’s say that we are meeting to sign some typical estate planning documents today. On the timeline, you’ll see three points: 1. today, 2. a point representing the possibility of your incapacity, 3. and death.
The Timeline IllustrationUnderstanding the Role of Potential Documents in Your Estate Plan LIFETIME POST-DEATH Last Will & Testament Today Incapacity Death Document: Last Will & Testament Use: the probate process is a “notice” system requiring delivery and filing of paperwork within strict timelines set forth by the court, an inventory fee is charged by the court based upon the value of the assets passing through the probate process.
The Timeline IllustrationUnderstanding the Role of Potential Documents in Your Estate Plan LIFETIME POST-DEATH Last Will & Testament Today Incapacity Death Revocable Living Trust Document: Revocable Living Trust Use: effective immediately when created, but dependent upon trust funding to accomplish its objectives. holds ownership of assets to avoid probate, provides additional control over assets, reduces costs & stress on surviving family members
The Timeline IllustrationUnderstanding the Role of Potential Documents in Your Estate Plan LIFETIME POST-DEATH Trustee Administers for OTHERS Trustee Administers for YOU You Create & Fund Trust PR Stands in YOUR Legal Shoes Today Incapacity Death Revocable Living Trust
Environmental ImpactProbate of Will (Notice Administration of Trust =System) = More Paperwork Less PaperworkMore frequent, heavier Less frequent, lighter mailingsmailings to more people (or email)More printing, copying, filing Less printing, copying, filingMore paperwork clogs up an Courts typically not involvedalready busy court system
My Role as Your Attorney I offer guidance and advice on how to accomplish your plan. I advise you of the consequences of your choices, offering you alternatives when appropriate. I prepare documents which simply, accurate and thoroughly accomplish your plan.
The traditional style… JO ANNE HINDS REVOCABLE LIVING TRUST NO. 1 JO ANNE HINDS, currently residing at 999 MAIN STREET, ANYTOWN, MI 49999 hereby makes and establishes this revocable living trust, to be known as the JO ANNE HINDS REVOCABLE LIVING TRUST NO. 1 DATED APRIL 21, 2012, reserving unto herself the exclusive right to amend or revoke the trust at any time during her lifetime, with JO ANNE HINDS as Settlor (hereinafter referred to as“SETTLOR”) and JO ANNE HINDS as trustee (“TRUSTEE”), for the purpose of providing asset management assistance during the lifetime of Settlor and to effect the distribution of the trust estate upon Settlor’s death.
…vs. writing trusts for today Declaration and Agreement of Trust Jo Anne Hinds Trust1. My name is Jo Anne Hinds. My address is 999 Main Street, Anytown, Michigan 49999.2. I am the creator of this trust. Under Michigan law, the creator of the trust is known as the “Settlor.” I also serve as the initial trustee of my trust.3. The name of my trust is the Jo Anne Hinds Trust.4. The date of this trust agreement is April 21, 2012.5. I may change (amend) or cancel (revoke) my trust at any time during my lifetime, as long as I remain competent.6. I create this trust agreement to provide my trustee with instructions about how to manage my trust during my lifetime and how to administer my trust and distribute my assets at my death.
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