What Actually Is A Trust?
A trust in Oklahoma City, or throughout the state, can be compared to a corporation. It is a legal entity that has the capacity to own property, both real estate and personal property. Whether it is a revocable trust or otherwise, it has some advantages over a corporation in that it can offer more privacy than a corporation can provide. There is no requirement that trusts report to the state in which it is created, so therefore, the state will not generally track ownership of a trust nor will the trust pay the state annual corporate taxes and fees. Furthermore, when the trustees change, it’s not necessary to notify the state that this has occurred as one has to notify the state when a corporation changes agents.
What Are The Advantages And Disadvantages Entailed In Setting Up A Trust?
One of the most popular benefits that a trust has to offer is that the assets owned by the trust are not subject to probate. Probate is expensive. According to the AARP, probate administration averages from 12 to 20% of the estate, so the avoidance of that expense is important. A trust does offer that advantage. Second, the trust avoids, in most cases, a need for a guardianship. If you were to become incapacitated, the person that you’ve nominated as your successor trustee, would be able to step up and take care of your financial affairs for you without having to file a lawsuit in the district court and having a guardian appointed for your benefit. Guardianships can be expensive.
On occasion, I have seen guardianships that cost tens of thousands of dollars because there was a dispute among family members as to who should be in control and what that person should do with the assets of the ward. If that ward had had a trust, and if the trust were well-drafted, the ward would have given detailed instructions as to who would be in charge and detailed instructions as to what should be done with his or her assets. The avoidance of a guardianship can save thousands of dollars. Third, a well-drafted asset protection trust can protect you and your estate from predators and creditors’ claims. Assets that are owned by the trust are generally not within your control, at least partially not within your control; and if the trust is done correctly, those assets will not be available to creditors and predators.
As for the disadvantages of a trust, you have to take the time out of your busy schedule and think about what will happen to your property when bad things happen to you. We human beings don’t like to think about such things; and when we have an excuse such as “I’m too busy,” we generally don’t think about these things, so the disadvantage is you have to take the time, make a plan and spend the effort to get guidance on how to do it correctly.
What Happens To People Who Do Not Set Up A Trust Prior To Their Death?
People who do not have trusts face the very likely need for someone to take control of their assets, pay their bills and maintain their property when the owner of those assets becomes ill. Further, when the owner passes away, the estate will go through estate administration or probate, both of which are very expensive and time-consuming. Moreover, probate is conducted under the control and rules of the government. The government makes the rules, you don’t make the rules, and therefore the outcome may not be what you anticipated.
If Someone Sets Up A Living Trust Prior To Their Death With the help Of a Living Trust Attorney, Will It Still Take Time To Process The Estate in Nicoma Park, Forest Park, Or Other Areas Of the State?
It can, but it doesn’t always. It depends on the number of trustees involved, the assets involved and the number of beneficiaries. If, for example, a husband and wife have created a trust, pass away, and have only one child as their surviving trustee and their only beneficiary, that trust administration may take only a few hours. It may take the trustee a while to get around to doing the work, but it will only take a few hours of work. But if there are a multitude of assets and a host of beneficiaries, then it is likely that trust administration is going to take some time.
The trustee is going to be tasked with gathering the assets, paying the bills, paying the final expenses related to the trustor and then reporting to the beneficiaries what the trust owns, what bills it has paid and how it anticipates dividing the remaining assets of the trust. The beneficiaries will have the opportunity to ask questions, make suggestions, ask for receipts and the like, and satisfying their questions may take some time. When all the questions have been answered and the beneficiaries have agreed with the trustee’s proposed distribution, the trustee can then write the checks or draft the deeds as appropriate and distribute the assets of the trust and close it.
Sometimes, it takes a long time; it just depends on the character of the beneficiaries and the amount of work necessary to give them a comprehensive report and gain their approval.
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