Wills and trusts -- Needed now more than ever

​"The three immutable facts: You own stuff. You will die. Someone will get that stuff." - Jane Bryant Quinn, financial writer

BY JULIA ANDERSON
After a yearlong saga, I am celebrating this week that I signed and have had notarized legal documents that should serve me the rest of my life – a will and a living trust.
 
With the onset of the virus shutdown coupled with daily news about the mounting virus deaths of people my age, the urgency to get something done reached near panic for me. What if I got the virus, were whisked off to a covid-19 unit never to return. I would die without goodbyes or a written legal plan for settling my estate, my burial wishes or who gets what when. My old will was woefully out of date. Yikes!
 
Following months of effort, the documents were ready to sign but because of the virus shutdown, going to an office was not an option. I could wait or my attorney offered to have a “signing” in the empty parking lot of a local retail shopping center, I said with joy, “Let’s do it!”
 
Two staff from her office showed up in one car with the documents, we arrived in our pickup. The truck tailgate made a perfect outdoor desk for signing seven pieces of paper ferried one at a time from the lawyer’s vehicle to the truck tailgate, then back.
 
We all wore masks. They wore gloves, as well. I brought my own blue pen so there would be no transfer of virus molecules from me to them. We periodically used spray disinfectant.
 
At my age (73), I have accumulated assets in a retirement account and an inherited stock portfolio plus 20 years of equity in my house. I also own a rental house.
 
My husband and I have a pre-nuptial agreement that gives all of his assets to his kids at his death and my separate assets to my two sons and grandson free and clear at my death.
 
My mother, bless her, showed me the way by setting up a pass-through will and Living Trust for her own estate naming a bank as her co-trustee. The plan worked well in the final years of her life and kept down the stress level after her death when the bank trust department settled her estate. I would like to do the same.
 
It took longer than anticipated for my plan to come together but I’ve come to realize that estate planning attorneys work at a different pace. In my attorney’s life this past 12 months there was an illness (hers) and a death (her father’s) that meant delays. Bottom line: I am happy with the result and thankful for the hours she put in to crafting my documents. Could I have done this myself? Maybe. 
 
So, what have I got? I have a signed and notarized Revocable Trust or what most people call a Living Trust. What is it? A living trust is a legal entity set up through a will and trust documents that allows the trust to “own” my assets --- retirement/investment accounts, bank accounts and real estate. It also can include jewelry and furniture. As the grantor, I transferred ownership of my assets to the trust, but I continue to manage these assets just as before.
 
For a thorough and easy-to-understand explanation of trusts, click here.
 
What are the benefits of a living trust? They save time and money in settling your estate when you die. They offer more legal protection than a simple will if challenged in court and protect your privacy. They also can be used to manage your affairs before you die by turning that work over to a bank trust department. The bank charges a fee, usually a percentage of total assets to provide these services.
 
In my mother’s case, she turned to her local bank trust department to pay her bills, manage her farm and take care of her assets in the last years of her life when she could no longer do so because of declining health. She died one month from her 99th birthday.
 
My trust does more than that. It settles my estate but also sets up follow-through trusts for my children and grandchild after I am gone. My plan is to give them professionally managed financial support for at least 10 years after my death.
 
There are downsides – the bank trust department will charge a management fee for this service and tends to handle investment assets more conservatively than I would. That could mean less income.
My estate is hardly big enough for trust departments to want to manage but I am doing it for these reasons:

1. In my last years, if I no longer can manage my affairs, I will turn to outside professional help.
2. The trust manager will settle my estate at my death in an efficient and timely way without hassles. No burden for my children.
3. Ongoing survivor trusts for my beneficiaries hopefully will support them financially. A big chunk of money (if there is any) won’t land on them like a ton of bricks messing up tax status etc.

 
In addition to the will and trust documents, I am attaching a Tangible Asset List spelling out who gets my jewelry, my furniture, and my poster of the Big Loop Rodeo. My husband gets our jointly owned vehicles and the right to go on living in my house if he wants. My trust continues to pay the property taxes and insurance, he would pay household expenses such as the power bill and trash pickup.
 
Most people probably don’t need a Living Trust. A will does the job for 95 percent of us. But the sad fact is that only 55 percent of adult Americans have gone to the trouble of even writing a will. That leaves heirs to pick up the pieces after they die. It leaves them to argue over who’s in charge, over money, real estate, and the stuff inside the house. I have reported and written about many cases where the death of a parent triggers ugly fights among siblings, stepchildren, and grandchildren.
 
Financial abuse -- not likely in my case -- can become a temptation for children or grandchildren who may convince themselves that they deserve an early inheritance. A living trust avoids that by putting a bank trust department in charge in your final years. Trust departments are legally required to make monthly or quarterly reports to heirs and to those with Power of Attorney for your affairs.
 
In my mother’s case, all she had to worry about was playing bingo and getting her hair done at the care center. She kept her eye on things, followed the stock market and had regular chats with her bank trust officer. She did the right thing for all of us.
 
I hope to do the same.
 
For more:
9 Reasons Why you Should consider a Living Trust, Kiplinger, click here
Abusive trust tax evasion schemes Q&A from the IRS click here
nolo.com Do it yourself living trust. click here.
daveramsey.com click here
LegalZoom click here
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