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Frequently Asked questions when completing an Estate Plan

Standard Trust: (the most common option)

With a Standard Trust upon the death of the first spouse, any debts, taxes and expenses are paid and specific bequests of the deceased distributed.

Then 100% of the remaining assets are left in the trust. The surviving spouse can make changes to the trust, including adding, removing, or changing the distribution allocations for beneficiaries, adding and removing assets or even dissolving the trust.

The Standard Trust is a common option for smaller estates not concerned with estate taxes, families without significant sole & separate property, and families without children from a previous relationship.

Essentially an AB Trust 'splits' upon the death of the first spouse, the Standard Trust does not.

For more information on an AB trust close this box and click AB Trust

AB Trust: (the more complex 'split' option)

AB Trust:

Essentially an AB Trust 'splits' upon the death of the first spouse, the Standard Trust does not.

With an AB trust, upon the death of the first spouse, assets are "split" into two separate trusts, (Trust 'A' and Trust 'B', hence the name AB Trust). Trust 'B' is for the deceased's share of the assets and the beneficiaries identified in the trust. When the split occurs, assets are divided by ownership. Those who have identified "sole & separate property" will have 100% of those assets transferred into their "split", so Trust 'A' and Trust 'B' may not be equal value.

In addition upon this split, the deceased spouse's selections become irrevocable. The deceased spouse's share of the assets are used to pay and debts, taxes, expenses, and make specific bequests. The remainder is held in trust for the benefit of the surviving spouse for his/her lifetime. The surviving spouse can ONLY make changes to their half of the "split" (Trust 'A') during their lifetime. When the surviving spouse dies, then the beneficiaries get their distributions as originally outlined.

This option can add significant complexity for successor trustees managing the AB trust after the first spouse dies, but the benefits may be worth it in certain situations.

An AB trust is usually selected by those with larger estates to maximize estate tax exemptions/credits, or those with children from a previous relationship, or those seeking a measure of asset/creditor protection for the surviving spouse.
Estate Tax:
In the past the most common reason to have an AB trust was to maximize estate tax exemptions/credits for those with estates subject to estate taxes. However, with the new federal portability law, federal estate tax exemptions can be maximized without an AB Trust by completing IRS Form 706 after the first spouse dies.

However, a number of states have local estate taxes and may not provide the same "portability" as the IRS, (and many of those start taxing estates at lower levels too). A family may be exempt from Federal estate taxes but still use an AB trust to maximize state exemptions. Talk to your tax advisor if you are unsure if this situation may apply to you and your estate.

Children From A Previous Relationship:
After the death of a spouse, after a period of time it is not uncommon for widow(er)s to try and move on with their lives. Over time, bonds change, even remarriage and new children and they may want to change the trust to reflect these new bonds.

AB Trusts are commonly selected by those who have children from previous relationships, or those who want to guarantee their current kids or other family members are not forgotten. With a standard trust, children from a previous relationship could see their shares reduced or even eliminated.

Since a surviving spouse cannot change the beneficiaries in your 'B' trust, you know that your assets will not only benefit your widow(er) but you can have comfort that your children from a previous relationship will never be cut out of their rightful share.

Asset Protection:
There is no creditor protection in a revocable living trust while you are alive. However once you die, it can provide asset/creditor protection to your heirs. Since the assets in the 'B' trust are not considered owned by the surviving spouse, they are protected from creditors of the surviving spouse.

For more information on the Standard Trust close this box and click Standard Trust

What is 'Trust Date'?

Trust Date is very important because it effectively becomes part of the "name" of your Trust.

In all future documentation and communication you should refer to your trust both by name AND date. For example:

"Hatfield Family Trust dated on: 10/01/1970"

You CANNOT sign your trust BEFORE this date, but you can sign it afterwards.  Most users simply use today's date.

Please note that once selected, this date CANNOT be changed so be sure you are ready when you pick your Trust Date.

Over time people may need to make changes (amendments or restatements) to their trust. The trust date makes it easy to specify which trust you are refering to; you cannot complete your trust until you have selected a Trust Date.

What are Spendthrift Provisions?

Please watch this short video:

Do you or your spouse have property that is not community or marital property?

Separate property is usually acquired before marriage.  This property may be part of any pre-nuptial agreement if one exists, but a pre-nup is not required to have separate property.

If you select "Yes", your property/assets will maintain its "Character", in other words if it was separate property before it went into the trust, it will remain separate property. 

If you select "No", then all property and assets will be considered community property once it is placed in the trust.

Surviving Spouse Rights?

Deciding who has control over assets after your death is a core purpose of creating a trust, but control must be balanced against the amount of credit protection you want for the surviving spouse.

If you provide unlimited access to trust assets to a surviving spouse, you provide tremendous flexibility. However with that flexibility is some risk.

If the surviving spouse has control over the assets, then it could be seized by the courts to pay debts or judgments as the result of a lawsuit.

This is a personal question as to how much you want to balance flexibility versus long term support & credit protection.

If you have an IRA and you want your trust to qualify for IRA "see-through" the IRS requires that the surviving spouse MUST have limited access (irrevocable upon the first to die). Please consult an attorney if you have questions about if an IRA "see-through" provision is something you may need in your trust.

Do you want to VOID your Trust in case of Divorce?

If you answer 'YES' to this question in the interview the following lines are added to the Trust:

"If our marriage is dissolved at any time this Trust Agreement shall become null and void.

It is our intent that our respective property held in our Trust shall not be used for the benefit of the other spouse upon the dissolution of our marriage. "

If you answer 'NO' then your Trust will persist even after a divorce.

You will need to remember to amend the Trust after, or as part of, any divorce settlement. Should one of you die without amending the Trust, assets will be distributed according to the original terms (which may not reflect your new situation).

Trustee Committee vs. Individual Trustee?

The Successor Trustee of your Trust controls and manages the trust for the benefit of the Trust Beneficiaries. He or she can move, sell, buy, and dispose of assets. You (and your spouse if you selected a two grantor trust) serve as initial Trustee(s).

However, some may not want a single individual to serve as Successor Trustee, but rather several people as part of a Trustee Committee. This is most often those with larger families who want to name all of their children to be on a Trustee Committee rather than selecting only one.

If you want to use a Trustee Committee, you will still need to select at least one alternate trustee should a member of your committee be unable or unwilling to serve.

Agreement of a majority of Trustees is required for the committee to act. If there are only two co-trustees, then both must agree before any action can be taken.

It is also important to consider that having multiple Trustees and Executors can result in extra complications, costs and delays, (especially if they do not live in the same geographic region.) For example, every named executor of your Last Will & Testament will be required to sign all documents (excluding alternates not appointed), this can delay property tranfers, add expense, and even occasionally lead to disputes between executors.

Please make this choice carefully. While many want to appoint all of their children as co-equal trustees, it is often much more efficient to pick the one who is closest geographically and designate others as alternates.

Why do you need to know about disability?

Do you have an Adult child with a disability that requires guardianship?

By choosing "Yes" you are designating that this adult child will need a guardian in case of your death. You will get to select your child's guardian in a later step.

By selecting "No" then this child will not need a guardian appointed in the Trust.

What is s Contingent Beneficiary?

What happens if a beneficiary dies before you do?

This is why the Contingent Beneficiary is designated. When you designate a contingent beneficiary, you get to decide what will happen to that share of the estate. You may select to give the money to the person's children, spouse, return the money to the trust to be distributed proportionally, or even select other different person(s) or organization(s).

When is it ok to have a duplicate beneficiary?

Normally the duplicate beneficiary warning is due to a mistake (accidently choosing the same person twice).

However there are a few situations where it is ok to have duplicate beneficiaries; specifically when you want to split a beneficiaries' share between multiple different contingent beneficiaries.

For example: If you have a child that would normally get 50% share, but if the child died before you, then you want the child's share to be distributed between two different charities. In this case you would list your child twice with a 25% share, each time with the different charity listed as contingent beneficiary.

Under this situation your child will still get their 50% if they are alive, or the contingent beneficiaries will get their 25% if the child has died first.

What is the Maximum Amount to Inherit?

The strongest way to keep an individual from having a claim on your assets after you die is to specify a cap on their distributions

Please note that in some states, your current Spouse is legally entitled to certain share unless a pre-nuptual or post-nuptual agreement is in place, separation is not sufficient cause to eliminate this claim. Please contact an attorney if you have questions about unusual family situations.

What is a Successor Trustee?

The selection of a Trustee is one of the most important decisions you will make in the creation of your trust.

After your death or incapacitation, your Successor Trustee(s) is/are responsible for managing Trust assets according to your wishes, paying any creditors and of course taxes owed. This person(s) (or institution) should be capable of managing these tasks.

If you are completing a Trust for married couples, (and have not selected to have a Successor Trustee Committee), your spouse is automatically your initial successor trustee before any alternates.

If a successor trustee is unable or unwilling to serve, then the duties would fall to the next alternate successor trustee. You must select both primary and 2nd alternate trustees. A beneficiary may also be a trustee, and they may be compensated for their work as a trustee.

You may also appoint a bank or a trust company as a successor trustee. However there are fees associated with institutional management (which could be significant for smaller estates). Also banks and trust companies often have a minimum estate size they will manage.

Check with your institution before naming it in your trust to make sure you qualify. Be sure to consider their management fees and the minimum annual charge for overseeing your trust, as well as any financial impact this will have on your overall estate.

If you have selected to use a Successor Trustee Committee, then agreement of a majority of Trustees is required for the committee to act. If there are only two co-trustees, then both must agree before any action can be taken.

Why do I need a Financial Agent?

The selection of a financial agent is an intregal part of your estate plan.

Your Successor Trustee is responsible for managing Trust assets in case of your death or incapacitation; but what about assets that have not been funded into the trust? (Such as checking accounts or other assets you forgot to fund into the trust).

This is the role of the Financial Agent. They manage all assets that have NOT been funded into the Trust (outside the trust).

It is common, but not required, to pick the same person(s) to be your Financial Agent(s) that you selected to be your Successor Trustee(s) because it simplifies financial management of all your assets. As with Trustee appointments, married couples usually appoint their spouse as their primary financial agent, however this is not required.

If your primary Financial Agent is unable to serve, then the duties would fall to the alternate Financial Agent you have selected. You must select both a primary and an alternate Financial Agent (a 2nd alternate is suggested but not required). A beneficiary may also be a Financial Agent.

Why do I need a Healthcare Agent?

The selection of a Healthcare agent is a very important and very personal decision.

With the increasing complexities of modern medicine, it is important that you appoint someone who can make decisions about your medical care when you are incapacitated, especially when situations where your closest family members may be unavailable, also incapacitated, or may not agree on treatment.

It is important that you appoint individuals who have similar views on medical care and continued life support, and will carry out your wishes outlined in your living will and advanced directives.

Married couples usually appoint their spouse as their primary healthcare agent, however this is not required.

If your primary healthcare agent is unable to serve, then the duties would fall to the alternate healthcare agent you have selected. You must select both a primary and an alternate healthcare agent.

A beneficiary or Trustee may also be a healthcare agent.

Why do I need a Living Will / Advance Medical Directives?

These decisions are difficult and very personal in the best of situations.

If you are struck down by a serious medical situation, your family members will undoubtedly be grief stricken and make these decisions much more difficult.

Feelings and emotions will run high and not all family members may be close by to consult on a decision. Many families have been torn apart due to disagreements or simple misunderstandings regarding end of life treatment decisions.

In addition without any formal health care documents, the doctors who attend you may use their own discretion in deciding what kind of medical care you will receive. If there is a question, doctors will usually turn to a close relative for guidance. Friends or unmarried partners, who may be most familiar with your wishes, are rarely consulted.

When there is no healthcare directive, problems often arise when family members disagree about what treatment is best. The worst of these battles are resolved painfully through hospital dispute resolution procedures or sometimes in court.

While making these decisions may be difficult now, it will provide tremendous comfort to your family and friends that they are able to follow your wishes should the unthinkable occur.

What do you mean by Resuscitation and Life Support?

In the event of cardiac or respiratory arrest, do you want any resuscitation measures?

Including cardiac compression, endotracheal intubation and other advanced airway management, artificial ventilation, defibrillation, administration of advanced cardiac life support drugs and related emergency medical procedures.

What do you mean by Artificially Administered Food and Fluids?

You will be unable to feed yourself or drink if your are in an irreversible coma or a persistent vegetative state, or in the later stages of most terminal conditions.

Do you want to request life sustaining food and fluids intravenously (by IV) in this situation?

What do you mean by Emergency Transport?

It is not uncommon that persons with a a terminal condition, or that are in an irreversible coma or a persistent vegetative state may be moved from a hospital to a hospice facility, in-home care, or other extended care facility.

In the event of a life threatening emergency do you want to request or refuse emergency transport to a hospital?

What do you mean by Pain Management?

It is not uncommon that persons with a a terminal condition, or that are in an irreversible coma or a persistent vegetative state may be faced with painful conditions.

Unfortunately, over time your body may require higher and higher doses of medication to provide a consistent level of pain management. Eventually higher doses of pain medication themselves become dangerous and may potentially hasten death.

In this situation do you want to request or refuse additional pain medication?

What do you mean by Pregnancy Exception?

Regardless of all other choices made, if you are pregnant do you wish to continue any life sustaining treatment if it is possible that the embryo/fetus will develop to the point of a live birth?

What is a Bequest?

Please enter a short description of the item you are giving.

This description needs to provide enough information so your Trustee can easily identify the asset and convey it to the recipient.

Remember that any asset that you want to bequest MUST be funded into the trust so these bequests can be processed.

Un-funded bequests will likely be tied up in a long probate process before the Trustee can convey the asset to the intended recipient. Please visit the funding kit after signing your trust documents.

If you wish to change your bequests, you can come back and edit this list at any time, but you need to print new documents for the changes to be effective.

For assets with a title (cars, homes) your Trust must be amended and restated (which requires new witnesses signatures and notary), for personal property (assets without a title) only the Memorandum of Personal Property needs to be updated (your signature and witness).

Should I use specific bequests? What are some examples?

Specific Bequests give you an opportunity to decide who should get certain items. From big things like homes and cars, to small things with little cash value but possibly enormous emotional value like a family heirloom passed down through the generations.

Specific Bequests are taken "off the top", in other words they are distributed BEFORE the beneficiaries get their percentages. So if you have 4 beneficiaries getting 25% each, it will be 25% of whatever is left AFTER the specific bequests are distributed. Specific Bequests are completely optional. There is no requirement to use this section, but often people find it useful for making sure special or sentimental items are given to the people you want.

Why are specific bequests used by those with small estates? The most common story we hear about from people who had no estate plan in place when a family member died is that within months or sometimes weeks, even close knit families can end up fighting over "who gets what".

Grief at the loss of a loved one is difficult. During the days following even expected losses survivors will often experience a full range of emotions, sadness, fear, anger, depression. This is a terrible time to decide "who gets what" because those natural feelings of anger and loss can be misdirected at other family members over the most mundane things. How? They fight over who gets "Dad's jacket", Mom's sewing machine, brothers' lucky cap. The specific bequests section allows you to make those decisions now. Families avoid the infighting since they know they are following your wishes.

One of the popular features our attorneys have written into our system is increased flexibility. ONLY titles assets (such as a home or a car) have to be listed in the Trust directly and need to be decided and entered now on this page so they can be included in your Trust documents.

We have a feature that allows you to make decisions regarding personal property (property that does not have a title, i.e. stuff in your house) later, not right now. Included in your documents is something called a "Memorandum of Personal Property". This document allows you to easily add/change/remove items of and who gets them upon your death. So only items with a title MUST to be added now. Items of personal property listed now will be pre-filled on the Memorandum of Personal Property but you can add, remove, or change them at a later date without having to re-do your Trust.

Why do I need to say who the bequest is From?

A bequest is a directive to your successor trustee to convey a specific item or cash amount upon your death.

These bequests are made BEFORE any other distributions in the trust.

Your trustee will need to know which items to give, AND when to give them.

Bequests will only be given upon the death of whomever is giving the item. So "From" is vital.

If you wish to change your bequests, you can come back and edit this list at any time, (however changes will require new signatures and witnesses to become effective).

What is Family Name?

Please provide a single word for your family, this is usually your last name or the combination of both spouses names, for example "Hatfield" or "Hatfield/McCoy".

This term will be used in the following context: "The Hatfield Family Trust"

Can I make changes after my documents are signed, if so how?

YES! Our software allows you to keep complete control over your legacy, you can make unlimited changes and there are no fees for these changes as long as you have an active subscription.

Once you create, print and sign your trust it is a legal document. Any changes must be in the form of either an amendment or a restatement. An amendment is a separate document that is an "add-on" to your trust. A restatement is a new Trust that replaces your old one, but keeps the old name so you do not have to move your assets.

You can make changes using either method. The software subscription you purchased supports unlimited restatements as long as you have an active subscription. All you need to do is notify Support that you want to turn on "restatement mode". (With one exception, you cannot convert/change editions. A married edition, two grantor trust will always be a two grantor trust. In cases of divorce, new trusts should be purchased by both spouses.)

The software defaults to "create a new trust mode" rather than "restatement mode". In other words, the documents generated are for a new trust. Once you have printed and signed your trust, if you want to make changes as a restatement, you need to notify support to convert your account to "restatement mode", it takes only a few seconds and you can start creating your restated Trust.

Once this change is made to the system, you can make any changes you want, add or remove beneficiaries, change bequests, change distribution amounts, add/remove disinherited individuals. Then you can print new documents with those changes, and once signed, they replace the old ones without needing to refund (move) your assets.

Why can't I change my trust name.

The name of your trust is set during your first login and initialization of your account.

Your account cannot be setup until a trust name is entered, and you cannot edit it later.

For your 'Trust Name', most clients prefer to use their last name such as "The Hatfield Family Trust" or "The Hatfield/McCoy Family Trust." The trust name you select will be used to legally identify your trust and the assets it contains.

You should include the word 'Trust' in your name, and you might want to add a 'The' at the beginning, (the software will NOT add those words if you omit them).

Please make sure you are comfortable with your choices because these choices become a permanent part of your Estate Plan Portfolio

If you have made a mistake on your trust name (such as a misspelling) and you have NOT generated your trust documents, you may contact support to request a one-time change.

Once documents have been executed (signed), the trust name cannot be changed. Make sure you are comfortable with your trust name before it becomes permanent!

Who can witness and notarize my documents?

The witnesses and the notary should not be relatives or in any way have an interest in your estate.

Neighbors usually work the best as witnesses. You do not want anything to raise flags or make it easier for someone to contest the documents.

Witnesses should have no affiliation whatsoever with the estate documents; this means witnesses should NOT be beneficiaries or bequest recipients (or persons related to them), successor trustees, healthcare or financial agents, or anyone else named in the documents.

Witnesses should have no affiliation whatsoever with any medical facility where the settlors may be currently or potentially be a patient.

Witnesses should have no affiliation whatsoever with any potential recipient of any funds from the trust (such as debtors of the grantors).

Adding or removing Personal Property

You do not need to restate your trust to add or remove your personal property with our system.

Our documents include a "Memorandum for Distribution of Tangible Personal Property". This document can be updated without having to re-do your entire trust, simply print a new copy of the memorandum (its one of the attachments at the end of your Trust Document set) update the information and sign with a witness (notary not required). This feature saves you time and money.

Please note this feature is for personal property ONLY (and cannot be used for titled assets such as cars).

Changing your trust after it has been executed (signed).

If you need to make changes to a trust after it has been executed (signed and witnessed), you must do a 'Restatement' of your trust.

A restatement allows you to update information, fix mistakes, add/change a beneficiary, or any other change to your documents. A restatement is basically a new trust replacing your old one.

You CANNOT just make a change to a page and re-insert it into your old documents. This will not be considered a valid change, and will be thrown out if challenged in court. Since it is a new document, it will require new witnesses and signatures. Fortunately since it is a restatement, you do not have to 're-fund' your assets.

Please contact support to have your account changed to print restatements. You will need to provide your 'old' trust name and the date you want for your restatement.

How to convert your account to print re-statements rather than new trusts.

Please contact your support to have your account converted to print re-statements.

Internally we can switch your account to print new documents or print restatements of old trusts. We can even restate (replace) trusts that where not created by our system.

We simply need to know the full trust name and date of your OLD TRUST, and what date you want for your new restatement.

What is Personal Property (and what isn't)? And why is it important?

A title is a document proving ownership of the asset, such as the title to your car or the deed on your home.

Personal Property are only items without a title such as TV's, computers, jewelry, etc...(the stuff around your house). Any asset with a title (such as a vehicle or real estate) is NOT personal property.

Personal property is automatically transferred into your trust by a blanket statement included in the documents. (This transfer of ownership into the trust is called funding the asset). However titled assets must be re-titled showing the trust as the new owner. Failure to transfer ownership of titled assets will require your heirs to go to probate court to get the property transferred under the "pour-over" will. (Probate is process that can become an expensive and time consuming burden for your heirs, but it can be avoided easily by creating and fully funding your trust).

If you want to make a Special Bequests of your assets, the process is different depending on the type of ownership. Personal Property can be transferred by adding to your Memorandum of Personal Property (without amending your trust).

However for titled property, the bequest of the asset MUST be written into the trust directly AND the property must be re-titled so the trust is the owner. It is very important that you classify the property correctly on the "Special Bequests" tab so it can be listed in the appropriate place in your estate documents. Failure to properly classify the asset (such as trying to bequest titled property as personal property) will invalidate the bequest and result in the asset being divided among all beneficiaries according to their share of the trust. (In most cases this results in heirs fighting over the asset(s) and sometimes even results in lawsuits).

One of the greatest benefits of having a trust is saving your heirs the burden and expense of probate court. Understanding personal property vs. titled property and classifying your property correctly is vital to making sure your assets are transferred according to your wishes after death. Funding your trust is the process of transferring assets into the trust so that your heirs do not have to go through probate. However the process differs depending on the asset type, so we have included an extensive funding kit to help you through that process (see our funding kit for more info).

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