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Show 171 Legal Lines Trusts may be better than wills Editor's Note: The following column it by Salt Lake City attorney T smart Hangc, who wlO submit column periodically on domestic legal Issue. Tamara participates weekly in the KALL radio program "Legal Eagles," answering questions. She is also legal counsel for Parents for Fairness in Family Law, a divorce reform group, and b associated with Utah Parents for Children's Rights. Sbe is in private practice In the anas of domestic, personal injury law and general practice. By TAMARA HAUGE Bing Crosby, Jack Kennedy and John Lennon all avoided probate by leaving their assets to their heirs through a trust. John Lennon's estate was estimated to be worth between $100 and $200 million, but the actual amount is not public knowledge because unlike wills, trusts do not have to become public documents. docu-ments. This reason alone is enough to make a trust attractive as an alternative to a will. Another advantage to a trust is that it does not require court hearings or attorney supervision; therefore, it is generally quicker and less expensive than probate. What is necessary for a trust to avoid probate? Are there other means of avoiding probate? What are their advantages and disadvantages? disadvan-tages? In order to avoid probate you must establish a trust by drafting draft-ing up the appropriate trust documents. In the trust, you set out who the trustee will be and what assets will be placed in the trust. In a "living trust," you designate yourself as trustee and you provide that you will have full power to manage all of your assets. This way you are not giving up any rights to any of your property during your life. In the trust document, you also provide for a successor trustee trus-tee someone who will take over if you become incapacitated or die. This can be your spouse, adult child, trusted friend, or any other person you designate. Once the trust is established, you then must be sure that legal title to all of your property is held by yourself as trustee for the trust. This way, when a successor trustee takes over, the bank accounts, automobile titles, and deeds to real property are already in the name of the trust. The successor trustee does not have to go to court to get access to these assets. All new assets acquired after you establish the trust should be registered in the name of the trust as well. In the trust, you can provide for distribution of your assets upon your death, just the way you would in a will. You can provide that your daughter receives your grandmother's china, your son gets the coin collection, and your wife gets the family , home and furnishings. If one of your children is a minor at your death, you can provide that the successor trustee can provide for the child from the trust until the child is an adult, and then distribute the balance of the trust. Or you can provide the trust assets be distributed when the child turns 25 or 30, or whatever age you choose. If an asset is not held in the name of the trust, and is held in your name only, it will have to go through probate regardless of any trust you may have set up. If an asset is held in your name and the name of someone else, such as your spouse, it passes to the joint tenant upon your death. This asset will not be distributed distri-buted under the trust, and it will not have to be probated. The two main disadvantages to joint tenancy are that, first of all, you give away your legal right to exclusively manage and control the property when you put someone else's name on the title. If the joint tenant is someone you trust, this will not be a problem. A second disadvantage to joint tenancy is that it makes the property vulnerable to your joint tenant's creditors. If your joint tenant owes a debt, the creditors may attach the property to satisfy the debt. If joint tenancy is selected as a means to avoid probate, an attorney should be consulted so that the proper form of joint tenancy is done. In summary, a living trust involves a substantial amount of work to draft the trust document, and to place all the assets in the name of the trust.This will cost substantially more in attorney's attor-ney's fees than the cost of drafting a will. A living trust will save attorney's fees upon your death, however, by making the court hearings and attorney's fees of probate unnecessary. Joint - tenancy is another alternative to probate, but the disadvantages should be weighed carefully. |