Rockford Community Education: Tools for Success with Trusts

Tools for Success with Trusts

This presentation is intended for educational purposes only.

The information contained herein does not constitute legal advice nor does it

create an attorney-client relationship between the viewer or participant and

Attorney Jo Anne Hinds.

Jo Anne HindsAttorney at Law

Rockford Public Schools Community Education

June 1, 2011

A Few Things You Need to Know

1. I am not here to sell you anything.

2. This is not a lecture! Good estate planning starts with a good conversation.

3. Creating a trust is a choice you may make to simplify your estate, but trusts (or wills)aren’t legally required for anyone.

Let’s do a little background research

What is a trust?

A trust is created when legal

ownership is separated from

equitable ownership.

Wills vs. Trusts – What’s the Difference?

Last Will & Testament

• Assets passing through will subject to probate

• Court costs• Public court file• Less control of assets• Provides for distribution of

your assets at death

Living Trust Agreement

• Assets passing through trust not subject to probate

• No court costs• Private agreement• More control of assets• Provides for your care for

your lifetime and distribution of your assets at death

The Timeline IllustrationUnderstanding the Role of Potential Documents in Your Estate Plan

Today Incapacity Death

Let’s pretend that today we are meeting to sign some typical estate planning documents. You may recognize the names of some of these documents, as they may be part of your estate plan.


Today Death

One of the most simple, yet powerful documents is the General Durable Power of Attorney. There are two types of General Durable Powers of Attorney. The first is Effective Immediately. The second is Springing, or Effective Upon Your Incapacity. The person you nominate for this role is called your “agent” or “attorney-in-fact.”

DPOA – Eff. ImmediatelyDPOA – Eff. on Incapacity

Incapacity


Today Death

A Health Care Power of Attorney is effective only upon your incapacity. The person serving under a health care power of attorney is your patient advocate.

Michigan law provides that 2 physicians or a physician and a licensed psychologist must determine in writing that an individual lacks the mental capacity to make their own medical treatment decisions before the document can be used.


Health Care Power of Attorney

Incapacity


Today Death

These documents appear on the LIFETIME side of the timeline.

Next, let’s take a look at another commonly used estate planning document, this time on the POST-DEATH side, the Last Will & Testament. The person who administers your will is called a personal representative.



LIFETIME DOCUMENTS


Incapacity


Today Death

Assets passing through a Last Will & Testament are subject to Probate. Your family can expect the following if your assets are subject to probate:

•Filing fees and court costs ($150 + $12 + Inventory Fee)•A minimum of 6-8 months, longer in many circumstances•Attorney fees, paperwork and timelines to be met



LIFETIME


POST-DEATH Incapacity


Today Death

Unlike the Last Will & Testament, a typical Revocable Living Trust starts on the LIFETIME side of the timeline, during which you may transfer assets into your trust, and perhaps even serve as your own trustee.

The person administering your trust is called your trustee. This may be you, or the person who takes over as your successor due to your resignation, incapacitation or death.



LIFETIME


POST-DEATH

Revocable Living Trust

Incapacity


Today DeathDPOA – Eff. Immediately

DPOA – Eff. on Incapacity


LIFETIME


POST-DEATH

Revocable Living Trust

A successor trustee may take over here due to your incapacity…

…or here, due to your death.

You serve as your own trustee for your lifetime, as long as you are competent to do so.

Incapacity

What basic tools make one trust more successful than another?

People

Plan

Paperwork

THE RIGHT PEOPLE

THE RIGHT PEOPLE

Trustee Beneficiaries

Settlor

Successor Trustee

Patient Advocate

Agent

Trust Lawyer’s Role

Guide

Advisor

Writer

A Carefully Designed Plan


…requires your input.

What are your goals?

… your expectations?

… your priorities?

…your wishes?

A living trust islike a basket.


…a plan for all assets

Funding your trust

… with real estate?

… with life insurance?

…with retirement accounts?

Well-Prepared Paperwork

VS

Not all trusts are created equally…

JO ANNE HINDS REVOCABLE LIVING TRUST NO. 1JO ANNE HINDS, currently residing at 999 MAIN STREET, ANYTOWN, MI 49999 hereby makes and establishes this revocable living trust, to be known as the JO ANNE HINDS REVOCABLE LIVING TRUST NO. 1 DATED MAY 12, 2010, reserving unto herself the exclusive right to amend or revoke the trust at any time during her lifetime, with JO ANNE HINDS as Settlor (hereinafter referred to as“SETTLOR”) and JO ANNE HINDS as trustee (“TRUSTEE”), for the purpose of providing asset management assistance during the lifetime of Settlor and to effect the distribution of the trust estate upon Settlor’s death.

Declaration and Agreement of TrustJo Anne Hinds Trust

1. My name is Jo Anne Hinds. My address is 999 Main Street, Anytown, Michigan 49999.

2. I am the creator of this trust. Under Michigan law, the creator of the trust is known as the “Settlor.” I also serve as the initial trustee of my trust.

3. The name of my trust is the Jo Anne Hinds Trust.

4. The date of this trust agreement is October 11, 2010.

5. I may change (amend) or cancel (revoke) my trust at any time during my lifetime, as long as I remain competent.

6. I create this trust agreement to provide my trustee with instructions about how to manage my trust during my lifetime and how to administer my trust and distribute my assets at my death.

Tools for Success with Trusts

The Right People


Well-Prepared Paperwork

• Wills, trusts, powers of attorney• Estate planning for clients of all ages• Estate administration and mediation services• House calls exclusively, at no additional charge• Weekday evening and Saturday consultations • Free 30 minute initial telephone consultations

Please complete the survey and be sure to include your email addressfor a copy of my helpful and informative e-newsletter.

Thank you!

Thank you from Jo Anne Hinds Advising Families Like Yours Since 1994