Living Trust Secrets

Living Trust Offers: How to Make Sure They are Trust Worthy

Part 2
by Phil Craig

© Phil Craig, All Rights Reserved
http://www.LivingTrustSecrets.com

 


In our last article we discussed unscrupulous
businesses that took advantage of the fears of
older persons to sell "trusts" or other "estate"
"products."

We'll continue with this issue…

The Federal Trade Commission, the government agency
that works to prevent fraud, deception and unfair
business practices in the marketplace, says that it
helps to learn the terms that are used in this aspect
of financial planning before you begin conversations
about it.

So, first, let's explain, simply, some basic estate
planning terms:

Probate is a legal process that usually involves filing
a deceased person's will with the local probate court,
taking an inventory and getting appraisals of the
deceased's property, paying all legal debts, and
eventually distributing the remaining assets and
property.

This process can be costly and time-consuming. Many
states have simplified probate for estates below a certain
amount, but that amount varies among states. If an estate
meets the state's requirements for "expedited" or "unsupervised"
probate, the process is faster and less costly.
 
A trust is a legal arrangement where one person
(the "grantor") gives control of his/her property to a trust,
which is administered by a "trustee" for the "beneficiary's"
benefit. The grantor, trustee and beneficiary may be the
same person. The grantor names a successor trustee in the
event of incapacitation or death, as well as successor
beneficiaries.

A living trust, created while you're alive, lets you control
the distribution of your estate. You transfer ownership of
your property and your assets into the trust. You can serve
as the trustee or you can select a person or an institution
to be the trustee. If you're the trustee, you will have to
name a successor trustee to distribute the assets at your
death.

The advantage of a living trust? Properly drafted and executed,
it can avoid probate because the trust owns the assets, not
the deceased. Only property in the deceased's name must go
through probate.

The downside? Poorly drawn or unfunded trusts can cost you
money and endanger your best intentions.

A will is a legal document that dictates how to distribute
your property after your death. If you don't have a will,
you die intestate, and the law of your state determines what
happens to your estate and your minor children. The probate
court governs this process.

And, the FTC advises, proceed with caution. Because state laws
and requirements vary, "cookie-cutter" approaches to estate
planning aren't always the most efficient way to handle your
affairs.

Before you sign any papers to create a will, a living trust, or
any other kind of trust:

    *Explore all your options with an experienced and licensed
estate planning attorney or financial advisor. Generally,
state law requires that an attorney draft the trust.

    *Avoid high-pressure sales tactics and high-speed sales
pitches by anyone who is selling estate planning tools or
arrangements.
   
    *Avoid salespeople who give the impression that AARP is
selling or endorsing their products. AARP does not endorse any
living trust product.

    *Do your homework. Get information about your local
probate laws from the County Clerk (or Register) of Wills.
   
    *If you opt for a living trust, make sure it's properly
funded - that is, that the property has been transferred from
your name to the trust. If the transfers aren't done properly,
the trust will be invalid and the state may end up determining
who inherits your property and serves as guardian for your
minorchildren.

 



    *If someone tries to sell you a living trust, ask if the
seller is an attorney. Some states limit the sale of living
trust services to attorneys.

    *Remember the Cooling Off Rule. If you buy a living trust
in your home or somewhere other than the seller's permanent place
of business (say, at a hotel seminar), the seller must give you
a written statement of your right to cancel the deal within
three business days.
 
The Cooling Off Rule provides that during the sales transaction,
the salesperson must give you two copies of a cancellation form
(one for you to keep and one to return to the company) and a copy
of your contract or receipt.

The contract or receipt must be dated, show the name and address
of the seller, and explain your right to cancel. You can write a
letter and exercise your right to cancel within three days, even
if you don't receive a cancellation form.

You do not have to give a reason for canceling. Stopping payment
on your check if you do cancel in these circumstances is a good
idea. If you pay by credit card and the seller does not credit
your account after you cancel, you can dispute the charge with
the credit card issuer.

    *Check out the organization with the Better Business Bureau
in your state or the state where the organization is located before
you send any money for any product or service.

Although this is prudent, it is not foolproof: there may be no record
of complaints if an organization is too new or has changed its name.

Good luck and until next time,

Phil Craig

P.S. Did you know you can search this site or the web for more Living Trust, Wills, Estate Planning and Probate answers?
Click here!


Phil Craig is a licensed attorney and entreprenuer.
He started practicing law at age 25 in 1979.
He does not take on any more clients, but is
advisor to some of the biggest names in the internet
world. He shares his knowledge gained over the
last 25 years at his Living Trust Secrets newsletter site:
click here=========>http://www.LivingTrustSecrets.com

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