By Mary M. Benzinger, Esquire, Senior Attorney, Pentagon Army and Air Force Legal Assistance Office
In my last article I showed you some ways to avoid probate of your assets when you die. Remember in the last article, I asked you to identify which of your assets had no owner at your death. These “orphan” assets will have to go through probate to get a new owner unless you take some steps to avoid probate. Common methods of probate avoidance are asset titling and proper beneficiary designations. Living Trusts are another means of asset titling to avoid probate.
I recommend that you have a lawyer assist you in creating a Living Trust. Living Trusts come into existence as soon as they are signed. The most common Living Trust is a “revocable” one. That means you can terminate the trust at anytime you choose. You may also move assets in and out of the trust as you please.
Once you have created the Living Trust, you must title assets in the name of trust (or designate the trust as the beneficiary of an asset) to avoid probate. For example, if I own a house in my name only and I die, that house would be an “orphan” and would have to go through the probate process to get to my heirs. To use my Living Trust to avoid probate of my house, I would record a deed in my county land records selling my house to my Living Trust. So then, when I die, my house is not an “orphan” because it is owned by the Living Trust and not by me. My Trust will have provisions in it for distribution of my house upon my death.
Living Trusts not only avoid probate but, properly written, can also define how your trust assets are managed if you become incapacitated. They can be a very effective estate planning tool.
In my next article I’ll discuss how to organize your documents and how to create an Estate “Grab ‘n Go” book.
You should consult an attorney who can advise you on creating the best Living Trust for your circumstances. Each state’s laws are different and you should consult your local attorney for advice.
Active duty or retired Servicemembers and their ID card holder Family Members may be eligible for free legal assistance. For more information on modifying or updating your documents and to find a legal assistance office near you, call your nearest military installation or go to http://legalassistance.law.af.mil/content/locator.php.
Mary Benzinger is the Army Legal Assistance Attorney at the Pentagon Army and Air Force Legal Assistance Office, Washington, D.C.