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(Part of a series of articles on charitable giving and the Union County Foundation by David Vollrath - Executive Director) For most of us any mention of the words "living trust" is promptly followed by a deer in the headlight type look and an immediate disconnect from the conversation. Recently a resource book came to my attention entitled the Retirement Bible by Lynn O’Shaughessy. This book addresses many important financial subjects that often we ignore because they just seem too complicated. This book cuts through the legalese and states the important points in language understandable to us "regular folk." The book’s discussion on living trusts is helpful. Let it first be said that to set up any trust you will need to work with a qualified attorney. Our County is blessed with an abundance of wonderful legal professionals willing to assist. A living trust simply is a revocable legal document that lets specific estate assets pass directly and immediately to named heirs instead of going through the potentially lengthy court system known as "probate." This bypassing of probate is the single biggest advantage of having a living trust. By avoiding the open nature of probate a living trust is arguably less likely to be contested and best suited to preserve the privacy of its distributions. Another advantage may be if you own property in other states the living trust will allow you to avoid lengthy, costly, and complicated out of state probate. Another advantage pointed out in the book out is that the living trust allows you to name in advance whom (successor trustee) you would like to step in to handle the financial and legal affairs of the trust's assets if you become incapacitated. You will decide and stipulate in advance how it is determined that you are no longer able to perform the afore mentioned duties. An example might be that certain physicians must agree that you can't manage your affairs. This transition occurs without court involvement. Safeguards can be written into the trust document regarding successor trustee actions. For many people the living trust has become the main piece of their estate plan. A living trust does not replace the need for a will. Inevitably there will be assets that are not included or named in the living trust. Alarmingly often a person may set up a living trust but then not follow through on putting assets into the name of the trust. A living trust does not work if it is" empty." If you intend for your house, car, stocks, etc. to be part of the trust you must have the assets titled to the trust. Any assets not included in the living trust will be distributed by the "pour over" will. The book makes several important additional points:
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