Secure Your Assets With Something Better Than A Trust

Eldercare, Funeral Pre-Planning, Power of Attorney, Wills

Lately, I’ve received many notes from clients with regards to their wills and trust, and how they can arrange the assets they own to gain advantage of various protections.

In response, I have drafted this memo in order to clear up their concerns.

The first bit of advice is that if you have a trust, it could be more beneficial to avoid transferring assets to the trust while you’re still alive. Instead, if you’re currently married, you should own all of your assets as JTBE  or Joint Tenants by Entirety.

If you do not have this arrangement currently, and the joint accounts you do have are entitled as “husband and wife” or “joint with right of survivorship”, or indeed, any other classification that is not JTBE, you should close these accounts and open an account in both your names as a JTBE account.

The reason for this is that in the event that one spouse is involved in a lawsuit, the joint assets stored in the JTBE account will be protected.

However, if one of the spouses should die, or if they divorce, then the protection of the assets provided by JTBE discontinues.

When you first set up a JTBE account, it is well worth enquiring with the financial institution you are doing business with, if you can name a beneficiary of the account should you both die. The beneficiaries of that account could either be an individual or your trust.

One word of caution

The one thing that should not be in joint ownership is an automobile, because if only one of you is involved in an accident, all of the assets that you own jointly could be at risk, and that includes JTBE assets.

In addition to which, you should also check your automobile insurance provision, as a lot of people are often under insured, so you should opt for an excess liability policy of at least $1 million. These excess liability policies are also called Umbrella policies.

Being able to protect your assets is vital, and you need to take all necessary steps in order to achieve this prior to being involved in any lawsuits, or before your financial situation becomes difficult.

As well as this, many assets come with their own forms of protection, such as the cash value life insurance policy and annuities that are fixed on your home. Pensions can also offer a certain level of protection against general and unsecured liabilities.

Using Trusts To Save Money

Eldercare, Funeral Pre-Planning, Power of Attorney, Wills

The world of understanding assets may be overwhelming to some, as the process deals with many legal guidelines and many papers that require filing.

Most of the time, we sign papers or converse with professionals that we believe are doing their job correctly, but sometimes we are left unsure.

If you feel this way, don’t worry you are not alone, as many feel the same way.

However, building a trust through a grantor can be one of the best decisions you make in your life. If you understand how a trust works, and how to create a fitting system, you have the ability to save a lot of money!

What Is A Trust?

A trust is a legal arrangement, in which a amount of property or assets is held by one party, in terms of benefiting one or several people belonging to a different party.

Usually, a trust is split up into four different categories.

1. The first category is the grantor, sometimes called settlor, who deals with the creation of the trust.
   
2. This then creates a trustee, or the person who will hold the assets, most of the time it is a bank, or a named entity. Sometimes, a grantor and a trustee may remain as the same person, having the person who creates the trust as the handler of the trust also.
   
3. The principal is the third category, and this deals with the certain property or assets that is being handled. This can be money, or property, or a combination of both.
   
4. Finally, the beneficiary wraps up the trust categories, marking the party who will receive the assets or property, this last category usually deals with the case in which the original owner dies, and the trust isn’t put into the will.
   

How Do Trusts Work?

There are four different types of trusts:

1. Named Living
2. Testamentary
3. Revocable
4. Irrevocable

These trusts are similar, but some details separate them.

Many people choose trust creations because of the potential benefits of saving money.

Trusts usually help save on estate taxes, can help control your assets in case of your demise, like decline in health or mental capability, and can help avoid a probate.

Probate is the process in which a will is verified, a process that can sometimes turn ugly and may require a lengthy period of time to validate.

Property Available In A Will

Eldercare, Funeral Pre-Planning, Power of Attorney, Wills

It is known death is a part of life, but sometimes a persons death will affect someone in terms of financial reasons, not emotional.

Too often wills are either left un-made, or are sloppily drafted, in which confusion is then enacted across the parties.

Knowing what a will is, and what’s available in terms of property to be included in a will, will make the process easier, and will guarantee the right people are getting your estate property and other items you own.

What Is A Will?

A will is a written document that validates what events will occur after you die.

If a will isn’t created, the court will appoint who they see fit, however this isn’t always the best decision.

A will is usually split into three categories, listing beneficiaries, or who will receive property from you after you die, executors who will oversee the estate, and will put the will through probate, or validating a will in the process of court.

After these two categories is dealing with children who are under 18, who may still require a guardian, in this chunk you will decide who would make the best guardian the case that you don’t live past them turning 18.

What Property Can Be Placed In A Will?

Before you think about dealing with what property goes where, you should take an in depth inventory of your assets.

This will help in deciding which beneficiary gets more or what not, and it will also help you in knowing what you got to work with.

In terms of property available in a will creation, real property, cash property, intangible personal property, and unproductive property are all available in place for a will.

Real property deals with physical estate, like houses, land, and buildings. Cash property applies to money, whether it be available in safes, checking accounts, or other bank accounts. Intangible deals with bonds and stocks that are tied with business ownership.

Unproductive property is property that is usually sentimental, property that cannot be reproduced.

This is family heirlooms and jewelry that has been passed down through each generation. This also deals with valuable objects like cars and other investments that are owned solely by one party.

Property Not Allowed

Not all property is allowed, as housing jointly owned, by two parties, cannot be included in a will.

This works in terms of marriage or split leases, where there are two identified people owning an estate.

Trusts also cannot be included in a will, as they highlight a specific beneficiary already.