Author: majenwen

If you are like many homeowners, your home is likely your family’s most valuable and treasured asset. In light of this, you want to plan wisely to ensure your home will pass to your heirs in the most efficient and safe manner possible when you die or in the event you become incapacitated by illness or injury. 

Indeed, proper estate planning is as much a part of responsible homeownership as having homeowners insurance or keeping your home’s roof well maintained. When it comes to including your home in your estate plan, you have a variety of different planning vehicles to choose from, but for a variety of different reasons, putting your home in a trust is often the smartest choice. 

In part one, we explained how revocable living trusts and irrevocable trusts work, and we discussed the process of transferring the legal title of your home into a trust to ensure it’s properly funded. Here in part two, we will outline the key advantages of using a trust to pass your home to your loved ones compared to other estate planning strategies.

The Benefits Of Putting Your Home In A Trust

While both wills and trusts are the most commonly used estate planning vehicles to pass on wealth and other assets to your loved ones, putting your home in a trust has a number of distinct benefits compared to using a will.

Avoiding Probate

One of the primary advantages of using a trust to pass on your home to your heirs is the avoidance of the court process known as probate. Unlike a will, assets held in trust do not have to go through probate. During probate, the court oversees the will’s administration, ensuring your assets are distributed according to your wishes, with automatic supervision to handle any disputes.

However, probate can be a long and expensive process, which can be emotionally draining for your loved ones. Depending on the complexity of your estate, probate proceedings can drag out for months or even years, and your family will likely have to hire an attorney to represent them, which can result in costly legal fees that can drain your estate. Plus, probate is open to the public, which can make things risky for those you leave behind, especially if the wrong people take an interest in your family’s affairs.

Unlike a will, if your trust is properly set up and maintained, your family won’t have to go through probate to inherit your home. Instead, your home will immediately pass to your loved ones upon your death, without the need for any court intervention. Avoiding the delay of probate can be especially critical when it comes to a home to ensure the property is properly maintained, since the home may fall into disrepair while probate is being completed. 

Finally, unlike wills, trusts remain private and are not part of the public record. So, with a properly funded trust, the entire process of transferring ownership of your home can happen in the privacy of your Personal Family Lawyer®’s office, not a courtroom, and on your family’s time.

Protection Against Incapacity

In addition to passing on your home to your loved ones when you die, putting your home in a trust can also protect your home in the event you become incapacitated by serious illness or injury. In contrast, a will only goes into effect upon your death, so it would be useless for protecting your home in the event you become incapacitated.

If you do become incapacitated with only a will in place, your family will have to petition the court to appoint a conservator or guardian to manage your affairs related to homeownership, including paying your mortgage and property taxes, keeping up with your home’s general maintenance, and overseeing the sale of your home. Like probate, the process of petitioning the court to appoint a conservator or guardian can be costly, time-consuming, and stressful.

And there’s always the possibility that the court could appoint a family member as a guardian that you’d never want to manage your family home. Or the court might select a professional guardian, putting a total stranger in control of your family’s most precious asset and leaving it vulnerable to crooked guardians, who could potentially sell your home for their personal financial gain.

With a trust, however, you can include provisions in the terms of the trust that appoint someone of your choosing—not the court’s—as successor trustee to manage your home’s ownership and/or sale if you’re unable to do so yourself due to incapacity. For example, your trust could authorize your successor trustee to sell your home in order to pay for the costs of long-term care should you require it.

Control Over Asset Distribution

Because you can include specific instructions in a trust’s terms for how and when the assets held by the trust are distributed to a beneficiary, a trust can offer greater control over how your assets are distributed compared to a will. For example, you could stipulate in the trust’s terms that the assets can only be distributed upon certain life events, such as the completion of college or marriage, or when the beneficiary reaches a certain age.

In this way, you can help prevent your beneficiaries from blowing through their inheritance all at once, and offer incentives for them to demonstrate responsible behavior. And as we mentioned earlier, as long as the assets are held in trust, they’re protected from the beneficiaries’ creditors, lawsuits, and divorce, which is something else wills don’t provide. 

Avoiding Family Conflict

If you leave your home to your loved ones using a will and you designate more than one person to inherit the property, there’s a potential for conflict because each individual gets an undivided interest in the home. Given this, these individuals must agree on what to do with the home—keep it or sell it—and they may not see eye-to-eye, which can create unnecessary drama that can tear your family apart.

For example, if one of your children wants to keep the home and live in it, but the other prefers to sell it in order to pay off their debts, the child who wants to sell could go to court in order to force their sibling to sell the property. However, this potential for conflict can be avoided by putting your home in a living trust.

If you name more than one beneficiary for your home in your living trust, you can name a neutral third-party as successor trustee to decide what happens to the home, and then manage the distribution after a clear determination is made. For example, the trustee could allow one child to live in the home, while the other could receive other estate assets of equal value, or the trustee could come up with some alternative solution to stave off the potential for conflict. 

Transfer On Death Deed

In some states you can use what’s known as a Transfer On Death (TOD) deed in order to transfer ownership of your home to your heirs without the need for probate. Initially created as an inexpensive alternative to living trusts, a TOD deed allows named beneficiaries to assume ownership of your home without undergoing probate or trust administration.

However, TOD deeds come with some major drawbacks, and they may end up creating unintended problems for your loved ones. To this end, before you rely on a TOD deed as a cheaper alternative to passing your house via a trust, consider the following factors:

• If your property is held joint tenancy, your joint tenant becomes the sole owner upon your death and has full control of the property, and your TOD deed would be inapplicable.
• Unlike with a living trust, a TOD deed cannot be used to manage, sell, or borrow against the property during your incapacity. This means that if you become incapacitated, the beneficiary of your TOD deed would be unable to access your home in order to sell or refinance the property to pay for your care, as your trustee could if you had the property in a living trust.
• If the beneficiary of the TOD deed is a minor upon your death, a court-appointed guardian will need to be named to control your property until the child reaches legal age. With a living trust, however, the person you named as successor trustee can manage the property until your child reaches legal age.
• Using a TOD deed in order to transfer ownership of your home to try and lower the value of your assets doesn’t count as a Medicaid spend-down, so it will not help you qualify for the program. Plus, depending on the state, the property may even be subject to the Medicaid Estate Recovery Program (MERP) after you die. As mentioned earlier, if you want to qualify for Medicaid and protect your home from MERP, meet with your Personal Family Lawyer® to discuss creating an irrevocable trust. 

Given these potential complications, using a TOD deed to transfer ownership of your home as an alternative to a living trust is almost never a good idea. Instead, your Personal Family Lawyer®, can help you find better ways to transfer ownership of your home that will keep your family out of court and out of conflict.

Find The Solution That’s Right For Your Family

Although putting your home in a living trust can be an ideal way to pass your home to your loved ones, each family’s circumstances are different. This is why your Personal Family Lawyer® will not create any documents until we know what you actually need, and what will be the most affordable solution for you and your family—both now and in the future—based on your family dynamics, assets, and desires.

The best way for you to determine whether or not your estate plan should include a will, a trust, or some combination of the two is to meet with your Personal Family Lawyer® for a Family Wealth Planning Session, which is the first step in our Life & Legacy Planning Process. During this process, we’ll take you through an analysis of your assets, what’s most important to you, and what will happen to your loved ones when you die or if you become incapacitated.

Sitting down with a Personal Family Lawyer® will empower you to feel 100% confident that you have the right combination of estate planning solutions to fit with your unique asset profile, family dynamics, and budget. In fact, we see estate planning as so much more than planning for death, which is why we call it Life & Legacy Planning—it’s about your life and the legacy you are creating by the choices you make today. Contact us today to learn more.

This article is a service of Marsala Law Firm, Personal Family Lawyer®. We do not just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Family Wealth Planning Session™, during which you will get more financially organized than you’ve ever been before and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session and mention this article to find out how to get this $750 session at no charge. 

If you are like many homeowners, your home is likely your family’s most valuable and treasured asset. In light of this, you want to plan wisely to ensure your home will pass to your heirs in the most efficient and safe manner possible when you die or in the event you become incapacitated by illness or injury. 

Indeed, proper estate planning is as much a part of responsible homeownership as having homeowners insurance or keeping your home’s roof well maintained. When it comes to including your home in your estate plan, you have a variety of different planning vehicles to choose from, but for a variety of different reasons, putting your home in a trust is often the smartest choice. 

Although you should consult with us your Personal Family Lawyer® to identify the best estate planning strategies for your particular circumstances, in this two-part series we’ll discuss how trusts work (both revocable and irrevocable), and then outline the most common advantages of using a trust to pass your home to your loved ones compared to other planning strategies.

What Is A Trust?

In simplest terms, a trust is an agreement between the “Grantor” (the person who puts assets into the trust) and the “Trustee” (the person who agrees to hold those assets) to hold title to assets for the benefit of the “Beneficiary.” Now, when the trust is a Revocable Living Trust, this agreement is typically made between YOU as the Grantor, and YOU as the Trustee, for the benefit of YOU as the beneficiary.

Why would you want to make an agreement with yourself, to hold title to assets for yourself, for the benefit of yourself? Well, it’s because by doing so you remove those assets from the jurisdiction of the court in the event you become incapacitated or when you die, and instead, you give the power to transfer those assets to your successor Trustee to handle without government or court intervention and keep it all totally private. This saves your family significant time, money, and headache.

Types of Trusts

While there are numerous different types of trusts available, when it comes to passing your home to your heirs, the two most commonly used trusts are a revocable living trust and an irrevocable trust. 

Revocable Living Trust

When using a revocable living trust, or living trust, you are free to change the trust’s terms or even terminate the trust completely at any point while you are living, thus the term “living” trust. You typically act as your own trustee during your lifetime, and then you name someone (and ideally more than one someone in succession) as a successor trustee to take over management of the trust when you die or in the event of your incapacity.

At that point, your successor trustee will be responsible for managing the assets, and eventually distributing the trust assets to your chosen beneficiaries according to the instructions contained within the trust’s terms. Because you remain in control of the assets held by a living trust, the assets are still considered part of your estate for estate tax purposes, and assets held in a living trust are not protected from your creditors or lawsuits during your lifetime. This is a very important and often misunderstood point. 

A revocable living trust does not protect your assets from creditors or lawsuits, and it has no impact on your income taxes. That said, as long as the assets are held by a living trust, they can be protected from your beneficiaries’ creditors, lawsuits, and even a divorce settlement. More on this below.

The key benefit of a living trust is to pass your assets (including, and especially your home) without any need for court or government intervention, and to ensure your home (and other assets) pass in the way you want, to the people you want. 

Irrevocable Trust

Unlike a revocable living trust, an irrevocable trust is (as the name implies), irrevocable. This means that the terms of the trust cannot be changed, and the trust cannot be terminated once it’s been executed. When you transfer assets into an irrevocable trust, you relinquish all ownership of the assets, and the trustee you have named takes total control of the assets transferred into the name of the trust. Because you no longer own the assets held by the trust, those assets are no longer considered part of your estate, and they typically won’t be subject to estate taxes upon your death, and they eventually will not be vulnerable to creditors or lawsuits, as long as the trust is properly constructed.

Although avoiding estate taxes and gaining protection from creditors and lawsuits may sound like a huge benefit, irrevocable trusts come with some serious restrictions and can be quite complex to set up. Because you no longer own the assets held in an irrevocable trust and generally cannot change the trust terms or terminate the trust once it’s been executed, putting your home in this type of trust should only be done with very clear and specific legal guidance by a lawyer who specializes in asset protection.

In light of these factors, if you are looking to set up an irrevocable trust in order to qualify for Medicaid, lower your estate tax liability, or for some other reason, meet with us to discuss your options.

Putting Your Home Into A Trust

For a trust to function properly, it’s not enough to simply list the assets you want the trust to cover. When you create your trust, you must also transfer the legal title of your home and any other assets you want held by the trust from your name into the name of the trust. Retitling assets in this manner is known as “funding” your trust.

Funding your trust properly is extremely important because if an asset, such as your home, hasn’t been properly funded to the trust, the trust won’t work, and your family will have to go to court in order to take over ownership of the property. Given this, it’s critical to work with us, your Personal Family Lawyer® to ensure your trust works as intended. 

While many lawyers will create a trust for you, few will ensure your assets are properly funded. As your Personal Family Lawyer®, we will not only make sure your home and other assets are properly titled when you initially create your trust, we will also ensure that any new assets you acquire over the course of your life are inventoried and properly funded to your trust. This will keep your assets from being lost, as well as prevent your family from being inadvertently forced into court because your plan was never fully completed.

Next week, in part two, we’ll continue with our discussion of the benefits of putting your family home in a trust.

This article is a service of Marsala Law Firm, Personal Family Lawyer®. We do not just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Family Wealth Planning Session™, during which you will get more financially organized than you’ve ever been before and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session and mention this article to find out how to get this $750 session at no charge. 

When it comes to estate planning, you’ve most likely heard people mention a couple of different types of wills. The most common is a “last will and testament,” which is also known simply as a “will.” But you may have also heard people talk about what’s called a “living will.”

Both terms describe important legal documents used in estate planning, but their purpose and the way in which they work is very different. Here we are going to discuss some of the most critical things you should know about living wills, and explain why having one is an essential part of every adult’s estate plan and how to get yours created or updated. 

1. What Is A Living Will?

A living will, often called an “advance healthcare directive,” is a legal document that tells your loved ones and doctors how you would want decisions related to your medical care handled in the event you become incapacitated and are unable to make such decisions yourself, particularly at the end of life. Specifically, a living will outlines the procedures, medications, and treatments you would want—or would not want—to prolong your life if you become unable to discuss such matters with doctors yourself.

For example, within the terms of your living will, you can spell out certain decisions, such as if and when you would want life support removed should you ever require it, and whether you would want hydration and nutrition supplied to prolong your life. 

Beyond instructions about your medical care, a living will can even describe what kind of food you want and who can visit you in the hospital. We’ll cover more of the specific decisions and scenarios addressed in a living will in more detail below.

2. Living Will vs Last Will & Testament

A last will and testament is used to ensure your assets are divided upon your death in the way you choose. Note that your will only deals with your assets, and it only operates upon your death. In contrast, a living will is about you, not your assets, and operates in the event of your incapacity, not your death. 

In other words, a last will tells others what you want to happen to your wealth and property after you die, while a living will tells others how you want your medical treatment managed while you are still alive. 

3. What Is An Advance Directive and How Is It the Same or Different Than a Living Will?

An “advanced directive” or “advance healthcare directive” are both general terms that describe legal documents that are related to your healthcare needs. Typically, an advance healthcare directive will include a living will (with instructions for how you want your medical care handled), and a medical power of attorney (naming the people you want making decisions for you, and giving them authority to talk with your medical team). 

4. Living Will vs Medical Power of Attorney

A medical power of attorney is the part of an advance healthcare directive that allows you to name a person, known as your “agent,” to make healthcare decisions for you if you’re incapacitated and unable to make those decisions yourself. While medical power of attorney is an advance directive that names who can make healthcare decisions in the event of your incapacity, a living will explains how your medical care should be handled. 

For example, if you become seriously ill and are unable to manage your own medical treatment, a living will can help guide your agent to make these decisions on your behalf, letting them know how you want decisions made. But it’s the medical power of attorney part of the document that says who should be making the decisions. In this way, medical power of attorney and a living will work closely together, and for this reason, they are sometimes combined into a single document.

Now, this is critically important to note: Not all living will form documents or templates include a medical power of attorney or the proper legal authorizations to give whoever you want making decisions for you (your agent) the legal authority to access your medical records. Therefore, if you are completing an online living will or advance healthcare directive, or supporting a family member to do so, make absolutely sure that the document legally names a decision-maker with at least two backup decision-makers, gives that person legal authority under HIPAA to access your medical records, AND provides specific and detailed instructions regarding how your medical care should be provided in the event of incapacity. 

5. Why Is A Living Will So Important?

A living will is a vital part of every adult’s estate plan, as it can ensure your medical treatment is handled exactly the way you want in the event you become unable to communicate your needs and wishes yourself. Additionally, a living will can prevent your family from undergoing needless stress and conflict during an already trying time.

Without a living will, your family will have to guess what treatments you might want, and your loved ones are likely to experience stress and guilt over the decisions they make on your behalf. In the worst cases, your family members could even end up battling one another in court over how your medical care should be managed.

6. Even Young People Need A Living Will

Although you may think that a living will is something that only the elderly or older people need, the fact is, you can experience a serious accident or illness at any age, which would leave you incapacitated and unable to communicate your wishes for medical care. For this reason, all adults over age 18 should have both a living will and a medical power of attorney in place.

One tragic example of just how horrific things can become when a young person becomes incapacitated without a living will in place is the case of Florida’s Terry Schiavo, who spent 15 years in a vegetative state after suffering a heart attack at age 26. Because she had neither a living will nor a medical power of attorney, Schiavo’s young husband fought her parents in court for years for permission to remove her from life support, specifically to remove the hydration and nutrition that was keeping her alive. The resulting litigation made news headlines around the world and exposed a deep divide among Americans over the right-to-die movement.

7. Decisions and Scenarios Addressed In A Living Will

A few of the most common types of decisions, treatments, and scenarios typically addressed in a living will include the following: 

• Tube feeding: You can include instructions about if and for how long you would want tube feeding used to supply you with nutrients and fluids needed to prolong your life.
• Resuscitation (CPR & DNR): Depending on whether or not you would want to be resuscitated in the event your heart stops, you can include what’s known as a Do-Not-Resuscitate (DNR) order in your living will. A DNR can also be a stand-alone document.
• Intubation & mechanical ventilation: You can state if and for how long you would want to be intubated and placed on a mechanical ventilator if you could not breathe on your own. This has become particularly important during the pandemic, since in severe COVID-19 cases, patients often require intubation, which involves putting you into a medically induced coma and inserting a tube into your windpipe, allowing oxygen to be pumped directly to your lungs using a ventilator.
• Pain management & palliative care: These are instructions about the types of pain management medications you would—or would not—want to be prescribed to you; if you want to die at home; as well as any other interventions you might want for comfort and pain management at the end of life.
• Organ/Tissue Donation: You can specify in your living will if you want to donate your organs and/or tissues for transplant following your death. Note that you will likely receive life-sustaining measures until any procedures are completed to remove your organs and tissues. 

8. Should You Do It Yourself With an Online Living Will?

While you’ll find a wide selection of generic living wills, medical power of attorney, and other advance directive documents online, you may not want to trust these do-it-yourself solutions to adequately address such critical decisions. When it comes to your medical treatment and end-of-life care, you have unique needs and wishes that just can’t be anticipated by fill-in-the-blank documents.

To ensure your directives are specifically tailored to suit your unique situation and that you actually get it done instead of just knowing you need to get it handled and never do it, work with experienced planning professionals like your Personal Family Lawyer® to create—or at the very least, review—your living will, medical power of attorney, and other documents. 

We don’t just ensure your documents get created correctly; we have processes to keep you moving forward beyond procrastination and actually get them signed (which is one of the biggest risks to your family), as good intentions alone won’t keep your family out of court and out of conflict should you become incapacitated without a signed (and updated) plan in place.

9. Communication is Vital

Even if you have the most well-thought-out and professionally prepared living will around, it won’t be worth the paper it’s printed on if nobody knows about it. Both living wills and medical power of attorney go into effect the second you sign them, so you should immediately deliver copies to your agent, your alternate agents, your primary care physician, and any other medical specialists you’re seeing.

And don’t forget to give those folks new versions whenever you update the documents and have them tear up the old documents. This is a standard part of our practice when serving our clients, so when you work with us to create your legal documents, we’ll ensure that everyone who needs to have your documents always has the latest version.

10. Don’t Wait Until It’s Too Late

Your living will and medical power of attorney must be created well before you become incapacitated and unable to make your own decisions. You must be able to clearly express your wishes and consent in order for these planning documents to be valid, as even slight levels of dementia or confusion could get them thrown out of court.

Not to mention, an unforeseen illness or injury could strike at any time, at any age, so don’t wait—contact your Personal Family Lawyer® right away to get these vital documents put in place. 

A Comprehensive Plan For Incapacity

A living will and medical power of attorney are just two of the legal documents you need as part of your overall plan for incapacity. You will also likely need other estate planning tools, such as a durable financial power of attorney and a revocable living trust, in order to have a truly comprehensive incapacity plan. We see estate planning as so much more than planning for death, which is why we call it Life & Legacy Planning—because it’s about your life and the legacy you are creating by the choices you make today.

If you’ve yet to create your incapacity plan, schedule a Family Wealth Planning Session™ right away, so as your Personal Family Lawyer®, we can advise you about the proper planning vehicles to put in place. And if you already have an incapacity plan—even one created by another lawyer—we can review it to make sure it’s been properly set up, maintained, and updated. Contact us today to get started.

This article is a service of Marsala Law Firm, Personal Family Lawyer®. We do not just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Family Wealth Planning Session™, during which you will get more financially organized than you’ve ever been before and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session and mention this article to find out how to get this $750 session at no charge. 

The pandemic has caused Americans to change their behavior in a number of different ways, and one of the most positive of these changes is related to estate planning. For the first time since the study’s inception, Caring.com’s 2021 Wills and Estate Planning Study found that young adults are now more likely to have an estate plan than middle-aged adults.

Specifically, the study found that in 2020 only 16% of Americans aged 18 to 34 reported having a will or another estate planning document, but in 2021, that percentage rose by 10 points to 26%—a 63% increase in just one year. Conversely, the 2021 study found that the number of 35 to 54 year-olds with an estate plan actually decreased from 27% in 2020 to 22% in 2021.

Since young adults are traditionally the least likely to engage in estate planning, the study’s results are particularly encouraging for this demographic. And the shift in behavior is largely due to the pandemic, with 45% of the 18 to 34 year-olds surveyed reporting that they were motivated by COVID-19 to get their estate plan started. Yet, it really shouldn’t take a global pandemic to motivate young people to take estate planning seriously.

In fact, all adults over age 18 should have some basic estate planning documents in place. And this is true regardless of how much money you have, whether you are married or single, and whether or not you have kids. On that note, if you are an adult of any age and the pandemic didn’t inspire you to create your estate plan, here are four reasons why you shouldn’t wait another day to get your plan started.

1. Incapacity Leaves Your Vulnerable

Most people assume estate planning only comes into play when they die, but that’s dead wrong—pun fully intended. Although planning for your eventual death is a big part of the process, it’s just as important—if not more so—to plan for your potential incapacity due to a serious accident or illness.

If you become incapacitated without an estate plan, your family would have to petition the court to appoint a guardian or conservator to manage your legal, financial, and medical affairs. This process can be extremely costly, time-consuming, and traumatic for everyone involved. Plus, the court could appoint a family member you’d never want in control of such crucial decisions (just look at what happened to Britney Spears), or the court could appoint a professional guardian, which would give a total stranger nearly complete control of your life and your assets.

As your Personal Family Lawyer®, we can help you put estate planning vehicles in place that grants the person(s) of your choice the immediate authority to make your medical, financial, and legal decisions for you in the event of your incapacity. We can also implement estate planning strategies that provide specific guidelines detailing exactly how you want your medical care to be managed during your incapacity, including critical end-of-life decisions.

While you may not be able to prevent a potential incapacity, meet with us your Personal Family Lawyer® to ensure you have control over how your life and assets will be managed if it ever does occur.

2. Control Who Inherits Your Assets

If you die without an estate plan, the court will decide who inherits your assets, and this can lead to all sorts of problems. Who is entitled to your property is determined by our state’s intestate succession laws, which hinge largely upon whether you are married and if you have children.

Spouses and children are given top priority, followed by your other closest living family members. If you’re single with no children, your assets typically go to your parents and siblings, and then more distant relatives, if you have no living parents or siblings. If no living relatives can be located, your assets go to the state.

Yet you can prevent all of this with proper estate planning and ensure your assets are distributed according to your wishes. Moreover, it’s important to note that state intestacy laws only apply to blood relatives, so your unmarried partners and/or close friends would get nothing if you fail to create a plan. If you want someone outside of your family to inherit your property, having an estate plan is an absolute must.

If you’re married with children and die with no estate plan, you might think things would go fairly smoothly, but that’s not always the case. If you’re married but have children from a previous relationship, for example, the court could give everything to your new spouse and leave your children with nothing. In another instance, you might be estranged from your kids or not trust them with money, but without a plan, state law controls who gets your assets, not you.

Or, in another situation, you and your spouse could both die, leaving assets to children who aren’t old enough to manage them, and requiring a long-term professional guardian to manage assets in ways you would never choose.

Moreover, dying without a plan could also cause your surviving family members to get into an ugly court battle over who should inherit your property. You may think this would never happen to your loved ones, but we see families torn apart by it all the time, even when there’s little financial wealth involved.

As your Personal Family Lawyer®, we can help you create a plan that distributes your assets in the exact manner you wish, taking into account your family dynamics and other contributing factors, so your death won’t be any more painful or expensive for your family than it needs to be.

3. Keep Your Family Out Of Court And Conflict

If you don’t have an estate plan—or if you only have a will (yes, even with a will)—you are forcing your family to go through probate upon your death. Probate is the court process for settling your estate, and even if you have a will, it’s notoriously slow, costly, and public. But with no plan at all, probate can be a total nightmare for your loved ones.

Depending on the complexity of your estate, probate can take months, or even years, to complete. And like most court proceedings, probate can be expensive. In fact, once all of your debts, taxes and court fees have been paid, there might be nothing left for your loved ones to inherit. And if there are any assets left, your family will likely have to pay hefty attorney’s fees and court costs in order to claim them.

Outside of these issues, the most burdensome part of probate is the frustration and anxiety it can cause your loved ones. In addition to grieving your death, planning your funeral, and contacting everyone you’re close with, your family will be stuck dealing with an overloaded court system that can be challenging to navigate even in the best of circumstances. Plus, the entire affair is open to the public, which can make things all the riskier for those you leave behind, especially if the wrong people take an interest in your family’s affairs.

Fortunately, the expense and drama of the court system can be almost totally avoided with proper planning. Using a trust, for example, we can ensure that your assets pass directly to your family upon your death or incapacity, without the need for any court intervention. And as long as you have planned properly, just about everything can happen in the privacy of our office and on your family’s time.

4. Minimize the Mess

Entirely separate from anything to do with court, conflict, or your legal documents, consider the reality of the mess you’ll leave behind if you do nothing. Look around yourself right now, what do you see? Someone would have to deal with all of that, if something happens to you, whether that something is an illness, injury, or death.

Then, imagine that same someone trying to figure out what you own, where it is, and how to access it? That’s the reality of the kind of mess you are subjecting someone you love to deal with if you do not get your affairs in order now.

With a Life and Legacy Plan in place (like the plans we create for our clients), you are minimizing the mess, providing clear instructions, and making it as easy as possible for the people you love to handle things for you, if and when something happens to you.

5. Ensure Your Kids Are Raised By the People You Trust

If you’re the parent of minor children, the most devastating consequence of having no estate plan is what could happen to your kids in the event of your death or incapacity. Without a plan in place naming legal guardians for your kids, it will be left for a judge to decide who cares for your children. And this could cause major heartbreak not only for your children but for your entire family.

You’d like to think that a judge would select the best person to care for your kids, but it doesn’t always work out that way. In fact, the judge could pick someone from your family you’d never want to raise them to adulthood. And if you don’t have any family or the family you do have is deemed unfit, your children could be raised by total strangers.

What’s more, if you have multiple relatives who want to care for your kids, they could end up fighting one another in court over who gets custody. This can get extremely ugly, as otherwise, well-meaning family members fight one another for years, making their lawyers wealthy, while your kids are stuck in the middle.

In light of these facts, if you have minor children, your number-one planning priority should be naming legal guardians to care for your children if anything should happen to you. This is so critical, we’ve developed a comprehensive system called the Kids Protection Plan® that guides you step-by-step through the process of creating the legal documents naming these guardians.

That said, naming legal guardians won’t keep your family out of court, as a judge is always required to finalize the legal naming of guardians in the event of death or incapacity of parents. But if it’s important to you who raises your kids if you can’t, you need to give the judge clear direction—and the Kids Protection Plan® does just that.

Additionally, you need to take steps to keep your kids out of the care of strangers over the immediate term, while the authorities figure out what to do if you’re incapacitated or dead. We handle that in a Kids Protection Plan®, too. And note MOST estate plans—even those created by lawyers—skip over this critical step because most lawyers aren’t well-trained on how to create plans for families with minor children. As a Personal Family Lawyer®, we’ve invested in specialized training to serve families with young children, and we are able to include Kids Protection Plans® with every plan we create.  

Get this process started right now for free by visiting our Kids Protection Plan® website, and then schedule a follow-up visit to put in place other estate planning strategies to ensure your children are fully protected no matter what happens to you.

Stop Making Excuses

While many people said that the pandemic inspired them to see a greater need for creating an estate plan, the 2021 Caring.com study also found that more than one in three Americans still don’t think that estate planning is important—or they haven’t even thought about it at all. But as we’ve outlined here, not having an estate plan can be incredibly traumatic and costly for both you and your loved ones, who will be forced to deal with the mess you’ve left behind.

You simply cannot afford to put off creating your estate plan any longer. As your Personal Family Lawyer®, we will guide you step-by-step through the planning process to ensure you’ve taken all the proper precautions to spare your loved ones from needless stress, conflict, and expense.

However, the biggest benefit you stand to gain from putting a plan in place is the peace of mind that comes from knowing your loved ones will be provided and cared for no matter what happens to you. Don’t wait another day—contact us, your Personal Family Lawyer® right now to schedule an appointment, so you can finally check this urgent task off your to-do list.

This article is a service of Marsala Law Firm, Personal Family Lawyer®. We do not just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Family Wealth Planning Session™, during which you will get more financially organized than you’ve ever been before and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session and mention this article to find out how to get this $750 session at no charge. 

If you’re an animal lover and have a pet of your own, you likely consider your pet to be a member of the family. And since your furry friends can provide protection, emotional support, and unconditional love, such consideration is often well deserved.

In stark contrast, the law considers your pet nothing more than personal property. That means that without plans in place, your pet will be treated just like your couch or vacuum in the event of your death or incapacity. 

For example, if you die without including any provisions for your pet’s care in your estate plan and none of your family or friends volunteer to take your pet in, your faithful companion will likely end up in an animal shelter.

While you can leave money for the care or your pet in a will, there will be no continuing oversight to ensure your pet (and the money you leave for its care) will be cared for as you wish, if you do it that way. Indeed, a person who is named as the guardian of your pet in your will could drop the animal off at the shelter and use the money to buy a new TV—and face no penalties for doing so.

What’s more, a will is required to go through a court process known as probate, which can last for years and leave your pet in limbo during that entire time. And a will only goes into effect upon your death, so if you’re incapacitated by accident or illness, it will be useless for protecting your pet.

Pet trusts

Given these limitations, the best way to ensure your animal companions are properly taken care of in the event of your death or incapacity is to create a pet trust.

Pet trusts go into effect immediately and allow you to lay out detailed, legally binding rules for how the funds in the trust can be used. Pet trusts can cover multiple pets, work in cases of incapacity as well as death, and they remain in effect until the last surviving animal dies.

Here are a few of the most important things to consider when setting up a pet trust:

Caregivers: The most important decision when creating a pet trust is naming the caretaker. The caretaker will have custody of your pet and is responsible for your pet’s daily care for the remainder of your pet’s life. As with naming a guardian for your children, make certain you choose someone you know will watch over and love your pet just as you would.

Consider the caretaker’s physical ability—naming someone elderly to raise your Great Dane puppy might be asking too much. Also make certain your pet fits in with the caretaker’s family members and other pets. Discuss your wishes ahead of time with a potential caretaker—never assume they’re willing to take on the responsibility.

In case your first-choice for caretaker is unable to take in your pet, name at least one or two alternates. If you don’t know any suitable caregivers, there are a variety of charitable groups that can provide for your pet if you’re no longer able to.

Trustees: Trustees are tasked with managing the trust’s funds and ensuring your wishes for the animal’s care are carried out in the manner the trust spells out. Given the potential conflict of interest, you may consider naming someone other than the caregiver as trustee.

In this way, you now have two people who are invested in the care of your pet—and money—are properly handled.

Caretaking instructions: At the very least, your caretaking instructions should outline your pet’s basic requirements: dietary needs, exercise regimen, medications, and veterinary care. Be sure you think about all of your pet’s future needs, including extra services like grooming, boarding, and walking.

Beyond basic care, you can also lay out instructions for just about any other special treatment you want your furry friend to receive. From sleeping arrangements and yummy treats to weekly visits to the park and favorite toys, a pet trust can provide Fido and Fluffy with whatever lifestyle you wish for them.

Finally, don’t forget to address what you want done at the end of your pet’s life, such as burial, cremation, or memorial services.

Funding: When determining how much money to put aside for your pet’s care, you should carefully consider the pet’s age, health, and care needs. Remember, you’re covering the cost of caring for the animal for the rest of its life, and even basic expenses can add up over time.

But most pet owners want their beloved pets to receive more than just the bare necessities. Given this, make sure you carefully calculate the costs for any special treatments or services you include in the trust and leave enough money to pay for them.

And if you end up leaving more money behind than needed, you can always name a remainder beneficiary, such as a family member or charity, to inherit any funds not spent on the pet.

Do right by your furry family

Consult with us as your Personal Family Lawyer® for help creating a pet trust. We can make certain that you have all of the necessary terms included in your estate plan to ensure your pet receives the kind of love and care it deserves when you’re no longer around to provide it. Contact us for more information. This article is a service of Marsala Law Firm, Personal Family Lawyer®. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Family Wealth Planning Session, ™ during which you will get more financially organized than you’ve ever been before, and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session and mention this article to find out how to get this $750 session at no charge.

Yours, mine and ours … in today’s modern family, it’s oh so common. The blended family is the product of 2nd (or more) marriages, in which one or more of the parties comes with children from a prior marriage. And then, they may even go on to have children together.

If you have or are part of a blended family, it’s important to understand how estate planning could be exactly what you need to keep your family out of conflict and in love, both during life, in the event of incapacity, and when one or more of the senior generation (read: parents) dies. 

Let’s begin with understanding where potential conflicts could arise when you have a blended family. 

Consider the ones you love

If you have children from a prior marriage, and you become incapacitated or die, leaving everything to your new spouse or partner, there is almost certain to be some conflict (whether spoken or not) between your children and new spouse. Your children may feel unloved, forgotten or resentful. 

You may think that this can be avoided by leaving everything to your new spouse or partner, and then on their death, to your children. But this too could set up a scenario where your children feel the need to monitor your spouse/partner’s use of your assets, during their life. And that may not be what you want.

Conversely, you may have a partner or spouse that you have not legally planned for, who you would want to inherit some or all of your assets. But, as things stand right now, your entire estate may go to your children from a prior marriage. This could create a reality where your current partner even gets kicked out of the house you share if something happens to you before your plan is updated.

You can avoid all of this (and even use the estate planning process to build stronger bonds with those you love) by having clear planning in place that has been discussed with your children and your new spouse or partner. We facilitate this as part of the planning process for all blended families.

If you are the child of a parent who has remarried or re-partnered, after a divorce or death, of your other parent, you may want to bring these issues to your parent’s attention.

If you are ready to create a well-thought-out estate plan for your blended family, start by sitting down with us, your Personal Family Lawyer®. During your Family Wealth Planning Session™, we can help you plan for the needs of your unique family and ensure everything and everyone you love is protected and provided for as you wish – including you. Our estate planning process guides you to protect and preserve what matters most. Before the session, we’ll send you a Family Wealth Inventory and Assessment to complete that will support your thinking on what you own, what’s most important to you, and what you can do to ensure your family is taken care of. You can schedule your Family Wealth Planning Session™ online with us or give us a call if you have any questions. We’re happy to help!

This article is a service of Marsala Law Firm, Personal Family Lawyer®. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love.  That’s why we offer a Family Wealth Planning Session,™ during which you will get more financially organized than you’ve ever been before, and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session and mention this article to find out how to get this $750 session at no charge. 

Even if you put a totally solid estate plan in place, it can turn out to be worthless for the people you love if it’s not regularly updated. 

Estate planning is not a one-and-done type of deal—your plan should continuously evolve along with your life circumstances and other changing conditions, such as your assets and the law. 

No matter who you are, your life will inevitably change: families change, laws change, assets change, and goals change. In the absence of any major life events, we recommend reviewing your estate plan annually to make sure its terms are up to date.

Additionally, there are several common life events that require you to immediately update your plan—that is, if you want it to actually work and keep your loved ones out of court and out of conflict. With this in mind, if any of the following events occur, contact us, your Personal Family Lawyer® right away to amend your plan.

1) You get married: Marriage not only changes your relationship status; it changes your legal status. Regardless of whether it’s your first marriage or fourth, you must take the proper steps to ensure your estate plan properly reflects your current wishes and needs.

After tying the knot, some of your most pressing concerns include naming your new spouse as a beneficiary on your insurance policies and retirement accounts, granting him or her medical power of attorney and/or durable financial power of attorney (if that’s your wish), and adding him or her to your will and/or trust.

2) You get divorced: Since divorce can be one of the most stressful life events, estate planning often gets overshadowed by the other dramatic changes happening. But failing to update your plan for divorce can have terrible consequences.

Once divorce proceedings start, you’ll need to ensure your future ex is no longer eligible to receive any of your assets or make financial and medical decisions on your behalf—unless that’s your wish. Once the divorce is finalized and your property is divided, you’ll need to adjust your planning to match your new asset profile and living situation.

3) You give birth or adopt: Welcoming a new addition to your family can be a joyous occasion, but it also demands entirely new levels of planning and responsibility. At the top of your to-do list should be legally naming both long and short-term guardians for your child. Our Kids Protection Plan offers everything you need to complete this process for free right now.

Once you’ve named guardians, consider putting estate planning vehicles, such as a revocable living trust, in place for your kids. These planning tools can make certain the assets you want your child to inherit will be passed on in the most effective and beneficial way possible for everyone involved. Consult with your Personal Family Lawyer® to determine which planning strategies are best suited for your family situation.

4) A loved one dies: The death of a family member, partner, or close friend can have serious consequences for both your life and estate plan. If the person was included in your plan, you need to update it accordingly to fill any gaps his or her absence creates. From naming new beneficiaries, executors, and guardians to identifying new heirs to receive assets allocated to the deceased, make sure you address all voids the death creates as soon as possible.

5) You get seriously ill or injured: As with death, illness and injury are an unavoidable part of life. If you’ve been diagnosed with a serious illness or are involved in a life-changing accident, you may want to review the people you’ve chosen to handle your healthcare decisions as well as how those decisions should be made. The person you want to serve as your healthcare proxy can change with time, so be sure your plan reflects your current wishes.

6) You relocate to a new state: Since estate planning laws can vary widely from state to state, if you move to a different state, you’ll need to review and/or revise your plan to comply with your new home’s legal requirements. Some of these laws can be incredibly complex, so consult with us to make certain your plan will still work exactly as you desire in your new location.

7) Your assets or liabilities change significantly: Whenever your estate’s value dramatically increases or decreases, you should revisit your estate plan to ensure it still offers the maximum protection and benefits for yourself and your loved ones. Whether you inherit a fortune, take out a new loan, close your business, or change your investment portfolio, your estate plan should be adjusted accordingly.

8) You plan to buy or sell a business: If you plan to sell a business, you can engage in estate planning strategies to avoid almost all of your capital gains taxes, if you revisit your estate plan ahead of time. And, of course, if you are buying a business, you’ll want to ensure your plan is updated to take into account your succession plans for the new business. 

For every business you own, you should consider creating a buy-sell agreement and/or a business succession plan to protect both your business and your family in case something happens to you. In your estate plan, you can not only decide who will take over your role as the company’s owner should something happen to you, but you can also provide him or her with a road map for how the business should be run in your absence by creating a comprehensive business succession plan.

At the same time, you should consult with your Personal Family Lawyer® to take advantage of the numerous tax-savings opportunities that may be available when you buy or sell your business. The tax laws are constantly changing, so you should consult with us to amend your estate plan to achieve the maximum level of tax savings possible in light of the latest changes to the tax code.

A Common Mistake

Outside of not creating any estate plan at all, one of the most common planning mistakes we encounter is when we get called by the loved ones of someone who has become incapacitated or died with a plan that no longer works because it has not been properly updated. Unfortunately, once something happens to you, it’s too late to adjust your plan, and the loved ones you leave behind are forced to deal with the aftermath.

Keeping your estate plan updated is so important, we’ve created proprietary systems designed to ensure these changes are made for all of our clients, so you don’t need to worry about whether you’ve overlooked anything like your family, the law, and your assets change over time. Be sure to ask us about these systems during your visit.

Furthermore, because your plan is designed to protect and provide for your loved ones in the event of your death or incapacity, as your Personal Family Lawyer®, we’re not just here to serve you—we’re here to serve your entire family. We take the time to get to know your family members and include them in the planning process, so everyone affected by your plan is well-aware of what your latest planning strategies are and why you made the choices you did, along with knowing exactly what they need to do if something happens to you.

For The Love of Your Family

As your Personal Family Lawyer®, our estate planning services go far beyond simply creating documents and then never seeing you again. We develop a relationship with you and your family that lasts not only for your lifetime but for the lifetime of your children and their children if that’s your wish.

Plus, we support you in not only creating a plan that keeps your family out of court and out of conflict in the event of your death or incapacity, but we will also ensure that your plan is regularly updated to make certain that it works and is there for your family when you cannot be. Contact us today to get started.

This article is a service of Marsala Law Firm, Personal Family Lawyer®. We do not just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Family Wealth Planning Session™, during which you will get more financially organized than you’ve ever been before and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session and mention this article to find out how to get this $750 session at no charge. 

Wills and trusts are two of the most commonly used estate planning documents, and they form the foundation of most estate plans. While both documents are legal vehicles designed to distribute your assets to your loved ones upon your death, the way in which they work is quite different.

From when they take effect and the property they cover to how they are administered, wills and trusts have some key differences that you need to consider when creating your estate plan. That said, when comparing the two documents, you won’t necessarily be choosing between one or the other—most plans include both.

In fact, a will is a foundational part of nearly every person’s estate plan. Yet, you may want to combine your will with a living trust to avoid the blind spots inherent in plans that rely solely on a will. As you’ll learn below, the biggest of these blind spots is the fact that if your estate plan only consists of a will, you are guaranteeing your family has to go to court if you become incapacitated or when you die.

To determine the right solution for your family, you should meet with us, your Personal Family Lawyer® for a Family Wealth Planning Session™. We offer a comprehensive process for helping you feel confident that you’ve chosen the right planning tools at the right fees for yourself and the people you love. 

In the meantime, here are some of the key differences between wills and trusts that you should be aware of.  

When They Take Effect

A will only will go into effect when you die, while a trust takes effect as soon as it’s signed and your assets are transferred into the name of the trust, known as “funding” the trust. To this end, a will directs who will receive your assets upon your death, while a trust specifies how your assets will be distributed before your death, at your death, or at a specified time after death. This is what keeps your family out of court in the event of your incapacity or death.

Furthermore, because a will only goes into effect when you die, it offers no protection if you become incapacitated and are no longer able to make decisions about your financial, legal, and healthcare needs. If you do become incapacitated, your family will have to petition the court to appoint a conservator or guardian to handle your affairs, which can be costly, time-consuming, and stressful. 

And there’s always the possibility that the court could appoint a family member as a guardian that you’d never want making such critical decisions on your behalf. Or the court might select a professional guardian, putting a total stranger in control of just about every aspect of your life and leaving you open to potential fraud and abuse by crooked guardians.

With a trust, however, you can include provisions that appoint someone of your choosing—not the court’s—to handle your assets if you’re unable to do so. When combined with a well-drafted medical power of attorney and living will, a trust can keep your family out of court and out of conflict in the event of your incapacity, while ensuring your wishes regarding your medical treatment and end-of-life care are carried out exactly as you intended.

The Assets They Cover

A will covers any asset solely owned in your name. A will does not cover property co-owned by you with others listed as joint tenants, nor does your will cover assets that pass directly to your loved ones via a beneficiary designation, such as life insurance, IRAs, 401(k)s, and payable-on-death bank accounts.

Trusts, on the other hand, cover any asset that has been transferred, or “funded,” to the trust or where the trust is the named beneficiary of an account or policy. That said, if an asset hasn’t been properly funded to the trust, it won’t be covered, so it’s critical to work with your Personal Family Lawyer® to ensure your trust works as intended.

Most lawyers will set up a trust for you, but few will ensure your assets are properly inventoried or funded, and we believe this is the single most important aspect of estate planning—and it’s one that is almost always overlooked. As your Personal Family Lawyer®, we will not only make sure your assets are properly inventoried and titled when you initially set up your trust, we’ll also ensure that any new assets you acquire over the course of your life are inventoried and properly funded to your trust on an ongoing basis, with various maintenance plans to ensure your plan works when your family needs it. This keeps your assets from being lost and prevents your family from being inadvertently forced into court because your plan was never fully completed.

Finally, even with the support of a lawyer like us, it can sometimes be difficult to transfer every single one of your assets into a trust before your death. Given this, consider combining your trust with what’s known as a “pour-over” will. With a pour-over will in place, all assets not held by the trust upon your death are transferred, or “poured,” into your trust through the probate process.

How They Are Administered

In order for assets in a will to be transferred to a beneficiary, the will must pass through the court process known as probate. During probate, the court oversees the will’s administration, ensuring your assets are distributed according to your wishes, with automatic supervision to handle any disputes.

However, probate proceedings can drag out for months or even years, and your family will likely have to hire an attorney to represent them, which can result in costly legal fees that can drain your estate. During probate, there’s also the chance that one of your family members might contest your will, especially if you have disinherited someone or plan to leave significantly more money to one relative than the others.

Bottom line: If your estate plan consists of a will alone, you are guaranteeing your family will have to go to court if you become incapacitated or when you die.

Furthermore, since probate is a public proceeding, your will becomes part of the public record upon your death. This means everyone will be able to learn the contents of your estate, who your beneficiaries are, and what they inherit, setting them up as potential targets for scam artists and frauds.

Unlike wills, trusts don’t require your family to go through probate, which can save them time, money, and the potential for conflict. Plus, when you have a trust set up, the distribution of your assets happens in the privacy of our office—not the courtroom—so the contents and terms of your trust will remain completely private. 

How Much They Cost

Wills and trusts do differ in cost—not only when they’re created, but also when they’re used. The average will-based estate plan can run between $1500 to $2,000, depending on the options selected. An average trust-based plan can be set up for $3,000 to $5,000, again depending on the options chosen. So at least on the front end, wills are less expensive than trusts.

However, wills must go through probate, where attorney fees and court costs can be quite pricey, especially if the will is contested. So even though a trust may cost more upfront to create than a will, the total costs once probate is factored in can actually make a trust the less expensive option in the long run. 

That said, each family’s circumstances are different, and this is why as your Personal Family Lawyer® we do not create any documents until we know what you actually need, and what will be the most affordable solution for you and your family, both now and in the future, based on your family dynamics, your assets, and your desires. 

With this in mind, our Family Wealth Planning Session Process™ is designed to compare the costs of will-based planning and trust-based planning with you, so you know exactly what you want and why, as well as the total costs and benefits over the long term.

Find The Option That’s Right For Your Family

The best way for you to determine whether or not your estate plan should include a will, a living trust, or some combination of the two is to meet with us as your Personal Family Lawyer® for a Family Wealth Planning Session™. During this process, we’ll take you through an analysis of your assets, what’s most important to you, and what will happen to your loved ones when you become incapacitated or die.

Sitting down with us, your Personal Family Lawyer® will empower you to feel 100% confident that you have the right combination of estate planning solutions to fit with your unique asset profile, family dynamics, and budget. Schedule your appointment today to get started.

This article is a service of Marsala Law Firm, Personal Family Lawyer®. We do not just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Family Wealth Planning Session™, during which you will get more financially organized than you’ve ever been before and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session and mention this article to find out how to get this $750 session at no charge. 

Your living trust is out of date and needs to be updated.

There are two options to updating your trust:

• Amendment
• Restatement

Amendment vs Restatement?

Amendment

An amendment to a trust only revisions certain sentences or paragraphs. In essence, you have an addendum to the trust that says, replace paragraph 3(A) with this paragraph. The remaining trust language remains the same, so you need a copy of the original trust document and all amendments. If you have multiple paragraphs that need to be updated, amendments become tedious, confusing and not as effective as a restatement.

Restatement

A restatement replaces every word of the original trust; it’s almost like a brand new trust. The trust name stays the same, so you don’t have to retitle your assets into a new trust. Restatements are preferred because you don’t need the original trust document to refer to. It offers more privacy. For instance, if you are removing a beneficiary, a restatement means that beneficiary will never know they were removed. With an amendment, the beneficiary can see all the changes and that they were removed.

Why a restatement?

For new clients, we almost always recommend a restatement.

It’s cheaper for you to have us restate your trust. We haven’t had a chance to get to know you and your family yet, we don’t have our notes and file open for you yet. We spend just as much time with you as someone who doesn’t have an existing trust. Further, an amendment would require us manually rewrite the update and match new language to old language. If you were to pay hourly for us to manual rewrite sections of your trust and double-check that everything a trust needs is included, you would spend a lot more money than if you simply had us restate your existing trust.

Clients often believe that they just need a simple update, to change a trustee for instance. However, when we do our 50-point review of the existing trust, we find the trust is missing critical protective language that should be included in the update as well. Once we add the missing language, the paragraph numbering gets confusing and we might as well restate the trust to keep it clear and simple.

Also, as mentioned above, an amendment also means that all your changes will be known. Some changes such as updating beneficiaries are more sensitive and keeping it private helps minimizes family conflict.

Finally, we can’t certify another attorney’s work, and the law is constantly changing. We find that it’s better for the client to have a trust with language they know was drafted correctly, with protective language, and will actually work when they need it.