Estate Planning – Should You Have A Trust? 14:51, September 25, 2015

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Estate Planning – Should You Have A Trust?

Garfield & Hecht, P.C. recently received an inquiry regarding setting up a trust. The client attended an estate planning seminar in which every attendee was advised to set up a trust in order to avoid probate.  However, the client held most of their assets in joint tenancy (which already transfers outside of probate). The client simply did not need to set up a trust that would likely cost at least $3,000 or more and rather merely needed an affordable estate plan package which costs $495.

A trust is a document which names a trustee to oversee the assets placed in it. Most individuals create what is known as a “living” trust in which they name themselves as trustee and then name a successor trustee to take over after their death. Once a trust is created, it only is effective to avoid probate if ownership of property is transferred to the trust.  If this step is not completed, upon death the trust is meaningless. If the trust is properly set up and all property is transferred into it, probate can be avoided.

Often, trusts are unnecessary for many reasons. Many assets are not subject to probate. Some exemptions are jointly owned assets with rights of survivorship and assets with designated beneficiaries like life insurance policies, annuities, and retirement accounts. For instance, a home or other property that’s owned jointly with the right of survivorship goes directly to the joint owner when you die. Similarly, pensions, retirement accounts and life insurance policies automatically transfer to the beneficiary. You can also add beneficiaries to bank accounts  with a “payable on death” form, to real estate with a beneficiary deed and to investment accounts with a “transfer on death” form. Your beneficiaries will just need to show up with a death certificate and a valid form of ID to get immediate access to the account. Furthermore, if your taxable estate is under $5,340,000 (the exemption amount for 2014), you don’t need to worry about trust strategies to minimize taxes – no taxes will be due if the exemption was not used for gifts.

Only assets that were owned by you in your individual name (and that do not have a beneficiary designation) are controlled by a will or current state law if you fail to leave a will. Assets that are owned in joint tenancy, such as real property or a bank account, or assets that have a beneficiary designation like a life insurance policy or IRA, pass to the beneficiaries by operation of law, and are not subject to the provisions in the will or the probate process.  Therefore, with proper planning an affordable estate planning package utilizing a will is often a great and more affordable choice.

If you have any questions, please contact one of Garfield & Hecht’s Estate Planning Attorneys below:


Aspen Avery Nelson 970-925-1936 ext. 222
Avon: Tracy Kinsella

970-949-0707 ext. 859

Glenwood Springs: Nicole Garmone-Garrimone 970-947-1936 ext. 811
William K. Guest 970-947-1936 ext 812