Why Everyone Needs at Least a Living Trust

There is one thing we all share in common: our days on this planet will come to an end - probably by surprise. That is about as basic a 'common denominator' as you can possibly get. To protect our loved ones from having to endure years of court procedures and legal fees, the Revocable Living Trust ('RLT') is a widely-used way to avoid the two related court proceedings known as Probate and Conservatorship, and to pass our assets on to one's loved ones with favorable tax planning.

WHAT IS CONSERVATORSHIP?

Conservatorship is court proceeding. It arises when someone cannot manage their financial affairs and it's time to have someone 'step in'. Maybe they've suffered a stroke or are in a coma or some other disabling condition. The court can appoint a 'Conservator' over the person or the estate or both. The conservator's job is to temporarily manage the financial affairs and property of the person they have been appointed for. This is often done by someone who's either a professional (a bank, a CPA, attorney, etc.) but sometimes it might be a family member who has the experience to warrant a court appointment. The conservator is given legal powers by the court that remain in place until the person recovers and is able to regain control over their financial affairs, or until death, whichever occurs first. Many times a person who has undergone a conservatorship proceeding may be placed in a residential treatment facility and the person who has been appointed as their conservator will manage their finances, bills, obligations, contracts, housing and other financial decisions on their behalf.

WHAT IS PROBATE COURT?

Probate is also a legal proceeding. When a person has died with no will the court supervises the estate, ordering property distributed according to the deceased person's instructions, or if there is no will, then according to local state law. An executor or personal representative is appointed by the court and he or she has the responsibility to report back to the court as matters are accomplished. Tax returns are prepared and filed. Bills are paid. Mortgages are satisfied. When the court is satisfied that all of the heirs have been identified, the bills, taxes and debts paid off, the remainder is distributed to the persons entitled under the Will. Dying without a will is dangerous. It can trigger distribution of assets that you do not control and may not have wanted.

LIVING TRUSTS AVOID THESE PROBLEMS.

With a Living Trust in place, you avoid both Probate and Conservatorship proceedings. That's because once you execute the trust and transfer ownership of your checking account, savings account, home and other property into the trust's ownership, the trust is in fact the 'owner' of the property. You of course are both the trustee (administrator) and the beneficiary during your lifetime. Under the trust, you decide who will take over as trustee afterward, and you alone decide who gets what and when. The successor trustees may be your most responsible child, a grandchild, a trusted fiend or relative or even a financial institution such as the trust department of a bank. With the Living Trust in place, you can simply bypass the need for either Probate or Conservatorship altogether.

If you are concerned about someone 'contesting' the trust, there is a way to avoid that problem. One way is to specifically disinherit someone by name so they can't later claim to a judge that you 'forgot them'. Another way is a way that I personally think is better. You leave that person a much smaller amount (say one dollar or five dollars) but no more, and you include a provision in the Living Trust that if any person contests your trust instructions, they are to be treated as if they died before you and are therefore entitled to nothing at all. This is an easy way to avoid having someone try to tie up your estate in litigation and at the same time penalize them completely if they choose to cause you any problems as to how you wanted to distribute your estate.

WHAT SHOULD THE LIVING TRUST OWN?

The Living Trust is a separate 'person' under the law and can own various kinds of property. Typically the kinds of assets that go in to a Living Trust include: your Personal Residence, Personal (not business) bank accounts, credit union accounts, certificates of deposit, brokerage or trading accounts, stock of subchapter 'S' corporations, personal furniture, tools and furnishings, and collections such as art, sculpture or other kinds of collections that may be of value. Basically, anything you want to avoid probate.

TAX PLANNING and THE LIVING TRUST.

There are some good opportunities for tax planning with the Living Trust. Using your Unified Credit, as of 2006 you are able to pass up to $2,000,000 (per person) down to your children. That's the number for single people. Married persons can each pass the same thing, so for a couple that means up to $4,000,000.

AVOIDING MISTAKES.

The most common mistake made with a Living Trust is the failure to properly 'fund' it. That means actually changing the ownership of your personal residence, personal checking accounts, etc. over to the legal name of your Trust. Some will establish a Living Trust, sign the appropriate documents (including the Power of Attorney for Health Care, the Pour-Over Will, Directive on Artificial Life Support, etc.) but never actually change legal ownership of their assets into the Trust.

Funding the trust means that you will record a new deed on your home in the county where the property is located. You'll also visit your bank or credit union and sign new signature cards as the 'trustee' of your Living Trust. If the bank or credit union needs a copy of your trust, remember that it is a private legal arrangement. So instead of allowing them to copy all the private provisions, simply provide them with a photocopy of the 'Abstract' (sometimes called the 'Certification') which sets forth the powers of the trustee and indicates who established the trust, etc.

Your Living Trust can literally save your surviving family members thousands of dollars in legal costs, probate fees, conservatorship fees, and months and months of administrative time. With a Living Trust as the owner, assets may be transferred relatively quickly and with a minimum of involvement by outsiders who might otherwise disrupt your plans for the loved ones you wish to benefit.

Michael Potter, Esq. is an attorney and national speaker whose presentations are an uplifting mix of humor, inspiration and practical strategies. His practice is focused on business and estate planning, accelerated retirement planning, identity theft, creating a tax-free inheritance, and core-values-based multiple-generation legacy planning. His e-mail address is WealthPreservation@cox.net. For more information see http://www.wealthadvisors.net

10 Important Topics to Know About Estate Law

When is it a good time to start an estate plan? In short: Now. The only time you can establish an effective estate plan is while you are alive and have legal capacity to enter into a contract. We can't predict when something will happen to us, but we can take steps to protect our loved ones and ourselves when they do. Talk to an experienced estate lawyer in Houston to learn how to protect your estate and your family. In the mean time, here are 10 important topics you should know about estate laws.

1) Definition of Estate

An estate is defined as all the property, real and personal, owned or controlled by an individual at the time of their death. This property may be in your name, held in a partnership, in a joint ownership, or through a Trust, and all other assets that would be paid upon your death, such as through life insurance.

Your estate includes:

1. Real property and things attached to it

2. All personal property

3. All businesses and business interests

4. Powers of appointment

5. Life insurance and annuity contracts, pension benefits, IRAs, etc.

6. All debts and obligations owed to others

7. All debts and obligations owed to the person or estate

8. All other claims against others

An estate does not include assets transferred to an irrevocable Trust during your lifetime. When assets are transferred to the Trust, you no longer own or control those assets, your Trust does. It is important to discuss your plan options with an experienced estate lawyer in Houston who can help you take an inventory of your personal estate.

2) Wills vs. Living Trusts

A will transfers property held in your name to the people and places you assign them to. You name an Executor to carry out your wishes and a Guardian for your children. A will goes into effect at your death and after it has been submitted to the probate court.

Unlike a will, a Living Trust is effective as soon as you make it and remains in effect throughout your lifetime. You select a person to carry out your instructions as the Trustee however, typically you are the Trustee. One or more persons are named as the Successor Trustees to take over if anything happens to you. Creating a Living Trust can help minimize, and sometimes avoid, expensive and lengthy probate.

3) Texas Probate Laws

Having a will does not prevent probate. Even with a written will, the court will want to validate your will and allow others to object to it.

The court considers several factors when validating your will:

1. Is there a latter version of the will?

2. Was the deceased mentally capable of making the will?

3. Is the will the result of fraud, mistake, or undue influence?

4. Was the will properly signed?

5. Is the will a forgery?

6. Are there any pre-existing contracts that make the will invalid?

7. Are there other claims against the deceased's estate that impact what the beneficiaries under the will would receive?

Probate is not mandatory in Texas. However, most banks and other institutions will not release assets or funds until the courts assign titles to assets, since they are afraid of being sued if someone lies to them about being a beneficiary. An order from a probate court will protect them from this liability.

4) Non-probate and Probate Properties

Property listed in the deceased's name only, without co-owners or named beneficiaries, is considered probate property. Any documents of ownership that are payable to the estate are also probate property. This includes real estate, vehicles, bank accounts, financial securities, employee benefit plans, foreign property, social security benefits, etc.

Non-probate estates include property owned in joint tenancy with a right of survivorship. These pass directly to the survivor if the documents are accurately prepared by your estate lawyer. With named beneficiaries, a life insurance policy, annuity, IRAs, 401(k) accounts, and other assigned accounts can bypass probate. These assets are transferred directly to the beneficiary who is named in the policy or account documents from the company or bank holding them. Assets put into a Trust while you are alive also avoid probate.

5) Payable on Death Property

Payable on Death accounts automatically pass on to the designated person without having to go through probate. However, during the life of the account owner, the payable on death beneficiary does not have an ownership interest in the account. Only after the account owner passes away does the beneficiary gain ownership of the account. The transfer can be completed by the beneficiary by providing the bank a copy of the death certificate.

6) Community Property with Right of Survivorship

In Texas, property acquired by either spouse during marriage is considered community property. Separate property consists of property owned by either spouse before marriage; property acquired during marriage by gift and nuptial agreements; and damages awarded to a spouse for personal injuries during marriage.

According to the Texas Probate Code, when one spouse dies, the surviving spouse already owns half of the community property. When a will is present, the deceased's half of the community assets are dispensed according the directions in the will. If a spouse dies without a will, Texas law dictates how their half will pass on.

1) The community estate property of the deceased spouse passes to the surviving spouse if:

a. No child or other descendant of the deceased spouse survives the deceased spouse.

b. All surviving children and descendants of the deceased spouse are also children or descendants of the surviving spouse.

2) If a child or descendant of the deceased spouse survives and the child or descendant is not a child or descendant of the surviving spouse, one-half of the community estate is retained by the surviving spouse and the other half is passed to the children or descendants of the deceased spouse.

7) Probate: How long and how much?

Probate length depends on the order your estate is left in. Well planned estates can get through probate in 3-6 months. Complicated estates that are disorganized can take years to gather assets, file taxes, and pay other debts. Debt disputes and lawsuits against the estate can also lengthen the probate process.

When everything is added up, probate can cost 3-7% of the total value of the estate. However, if your will is contested or the estate goes through other litigation, the cost can increase rapidly. An estate lawyer can help you get your estate in order and establish a plan that avoids the common pitfalls in probate matters.

8) Uncontested Will Probate

When a will is not contested, the named Executor visits an experienced estate lawyer in Houston who prepares a petition for the court. The petition is filed along with your will in probate court. The Houston estate lawyer must notify everyone named in the will as well as anyone who would have been legally entitled to receive property from you if a will did not exist. If the estate is in order and there are no objections, the court will approve the petition then:

1. Appoint a Executor

2. Order that taxes and debts be paid

3. Require reports be filed by the Executor to assure the property is accounted for and distributed in accordance with your will.

9) Duties of the Executor

It is the Executor's responsibility to gather the estate documents and file them with the probate court. Typically, the Executor hires an estate lawyer to assist and represent the estate during probate. After the proper documents have been filed with the probate court, the judge will issue letters of administration, which establish the legal authority of the executor.

After the letters are issued, the next stage of administration is identifying, collecting, valuing, and securing assets of the estate. An inventory of all assets and their value must be filed with the court. If the estate is large enough to require filing an estate tax return, similar information must be provided to the local and federal governments. A Houston estate lawyer can assist in preparing the inventory list, obtaining the valuations and preparing the necessary documents that need to be filed.

The executor must identify any outstanding debts owed to the estate and pursue collection of those debts. Once the will is determined to be valid by the probate court, the executor may begin to pay taxes and other claims against the estate. After all expenses have been paid, the executor can then distribute the estate to beneficiaries in accordance with the terms of the will and then close out the estate.

10) Estate Taxes

If estate taxes are due, a final tax return must be filed and the taxes paid before the estate can be distributed. Over 90% of all estates are exempt from federal estate taxes. In 2009 estates with a value of less than $3.5 million were exempt from estate taxes. The estate tax was repealed in 2010 and is planned to be reinstated in 2011 with an exempt amount of only $1 million. Congress frequently changes the tax laws and the estate tax is a heated topic currently being debated. If you have an estate that falls into this bracket, check with an experienced estate lawyer in Houston to make sure your estate plan is up to date.

Nichols Law is a board certified family law firm in Houston Texas.

Estate Planning - A Short Glossary

Drafting a will and planning for your estate is one of the most important decisions that you will make in your life. When you write a will, you are deciding how everything that you own will be passed on and who it will pass to in the event of your death. While some people avoid thinking about the future and the prospect of dying, estate planning is a smart decision that allows you to control and protect your estate even after you are gone.

When you decide to draft a will or create a trust fund, you will likely be bombarded with many legal terms that you may not be familiar with. This legal jargon can make estate planning seem overwhelming. On the contrary, it is a fairly straightforward process. Just knowing a few key terms and how they apply to you can clarify the estate planning process.

Estate: Your estate is all of the things that you own and owe, including all assets and liabilities.

Assets: Your assets are all of the things that you own, including property such as land, a house, a car, jewelry, furniture, heirlooms, and money in the bank. Assets also include copyrights, trademarks, and patents which are not physical things but ownership rights that you possess.

Liabilities: All of the things that you owe, such as loan, mortgage, and credit card debt.

Testator: A person who drafts a will.

Will: A will is a declaration of what you wish to happen to your estate once you pass away. It includes the names of all of the beneficiaries to whom you wish to pass on your property.

Beneficiaries: The people who you list in your will that will benefit from your estate.

Trust fund: An entity that you create to safeguard some of your assets in the interest of a beneficiary or beneficiaries.

Trustee: The person that you designate to manage a trust fund on your behalf and in the best interests of the beneficiary.

For More Information

To learn more about the estate planning process and how to draft a valid will, please visit the website of experienced Austin estate planning lawyers Slater Kennon & Jameson, LLP today.

Joseph Devine

You've Been Named As a Successor Trustee - Now What? Duties in the Administration of a Trust

If you've been named as the Successor Trustee of a Trust, all of the duties may seem overwhelming. Here's a checklist of things you need to do to administer the trust.

1. Review trust documents.

The first step in administering a trust estate is to locate and review all of the decedent's estate planning documents. Most estate plans include the Trust agreement (sometimes called Declaration of Trust), the Pour-Over Will, Power of Attorney, Health Care Directives and Living Will. Because the decedent has passed away, the Power of Attorney, Health Care Directive and Living Will are no longer valid. You should carefully review the Trust Agreement to determine the identity of the Successor Trustee, the identities of all beneficiaries of the trust and the plan of distribution the decedent intended. You should make a list of the beneficiaries with their names, addresses, phone numbers, e-mail addresses, age and social security numbers.

2. Make required filings

A. File original Will with Probate Court or the Clerk of Court. Most states require that you file the Will immediately or within a certain number of days after the death of the decedent. You will need to check with the County Clerk or Probate court to find out where to send the Will.

B. Record Death Certificate in County where decedent or trust owned real property. This will remove the decedent's name from the property tax rolls and provide evidence of ownership if the property is to be sold.

C. Obtain taxpayer identification number for trust.

D. File Notice of Trust with Probate Court or Clerk of Court. Again, this may not be required in every state. The purpose of this notice is to notify any creditors of the decedent or other interested party that, although the decedent has no probate estate, there is an existing trust that must be administered. Most states, after the decedent's death, completely cut off the claims of the Grantor's (decedent's) unsecured creditors. Some states that do not do this and require debts to be paid from trust assets are: California, Florida, Massachusetts, Michigan, New Jersey, New York and Oregon.

3. Obtain authority to serve as trustee.

A. If you are named in the trust as the Successor Trustee, you will need to have evidence of your authority to act as Trustee. The banks, brokerage firms and other third parties will not give you information or allow you to transact business on behalf of the trust until they have these documents. In most cases, you will need the following documents:

• Original signed trust agreement and all amendments to it.

• Death certificate of grantor

• Acceptance of Trustee Form. By this document, you accept the appointment of Trustee of the trust and agree to perform all of the duties of the Trustee pursuant to the Trust Agreement and the law.

• Any other documents required by the provisions of the Trust Agreement.

4. Notice requirements.

A. Most states require that all beneficiaries be notified within a specified period of time of the Trustee's acceptance of the Trust and the full name and address of the Trustee. Many states give a beneficiary of a trust the right to obtain a copy of the trust agreement. Unless, you have a valid reason not to, you should provide each beneficiary named in the trust with a copy of the trust agreement including all amendments.

B. Notify the post office to forward mail to your address so that you can receive any bills, checks or other mail of the decedent.

C. Notify the Social Security Administration.

D. Notify the personnel or human resources department at decedent's place of employment or former place of employment.

E. Notify banks, brokers, financial advisors, etc.

F. Notify telephone service and utilities.

G. Notify insurance companies. Obtain instructions for filing claims. Most insurance companies will only give notice to the beneficiary of the policy. Notifying the company will begin that process. If the trust is the beneficiary, you, as the Trustee, will need to apply for benefits.

H. Notify Credit Card issuers. They will provide an amount owed and close out the account. Also, if death was due to an accident, they may provide accidental death insurance.

5. Assemble, Inventory and Take Custody of Assets.

A. Search for assets. As Trustee, you have the duty to locate and take possession of all of the decedent's assets. Ideally, the decedent will have kept a schedule of all of his assets: those owned individually as well as those titled in the name of the trust. If not, or if the schedule is incomplete, you should locate the decedent's financial documents, such as bank statements, statements from brokerages and investment advisors, deeds, stock certificates, life insurance policies and federal and state income tax (or intangible tax, if applicable) returns.

B. Collect supporting data as to ownership. Once you have determined the existence of an asset, you should obtain the statements, certificates, contracts and policies regarding that asset.

C. Change Trustee on Existing Accounts and Open New Accounts. For each bank and investment account, you will need to change the name of the Trustee who has authority to manage the account from the decedent to you.

D. Determine date of death values (and, if applicable, alternate values). For investments and securities, you can contact the decedent's broker or financial advisor for this information. Also, there are many websites that can provide this data.

E. File claims for insurance, Veterans and Social Security benefits.

F. File waivers and affidavits releasing property from estate tax liens with the County Clerk's office or the State (if applicable).

G. Prepare Trust Inventory with date of death values of all trust assets and, in states where it is applicable, send copies to all trust beneficiaries.

H. Estimate cash needed for taxes, fees and other expenses of settling the estate.

6. Determine Debts Against the Decedent

A. Determine current bills owed to doctors, hospitals and funeral homes.

B. Make a diligent search to determine what other debts exist.

C. Determine validity of, contest or pay, and obtain receipt or satisfaction of debts. As Trustee, you have the fiduciary duty to examine each claim to determine its validity. If appropriate, you have a duty to deny payment of a claim and to defend that denial in court.

7. Administer the Trust Estate.

A. Collect all income, receivables and other moneys due decedent or the trust estate.

B. Investment of assets. As Trustee, you have the duty to preserve, protect and invest the assets of the trust estate.

C. Manage Real Estate. If any real property and the house built on it is vacant. You should take steps to secure the property and contents from vandalism and damage. If anyone is residing in the house, you should determine whether that person has the right to be in possession of the house. If the occupants are tenants, you should review the terms of the lease, if written, and make sure to enforce the provisions. You should notify the tenants in writing that the owner is deceased and that they are to make all future payments under the lease to you as trustee. Rent must be collected and deposited in the trust bank account.

D. Insure the Trust Property.

E. Keep a detailed record of all income, expenses and estate transactions.

8. File Tax Returns and Pay Taxes Due.

A. Decedent's final Form 1040.

B. Trust income tax return (Form 1041)

C. Estate Tax Return (Form 706)

9. Distribute the Estate.

A. You should read and fully understand the distribution provisions of the trust agreement. The distribution to beneficiaries is made after all debts of the decedent and expenses of the administration are paid. If distributions equal to a certain percentage of the estate are called for, then those percentages are calculated based upon the net value of the estate after payment of debts, expenses and taxes.

B. If the provisions of the trust provide that property is to be held in trust for the benefit of a certain beneficiary, then you, as Trustee, must hold and administer the property subject to the standards and duties that we have mentioned in this guide.

C. You must maintain accurate records regarding the trust property, including any additions of principal and income. Generally, you may make partial distributions to beneficiaries as the estate administration progresses in order to hold funds or property back for a period of time to pay unexpected liabilities. You can then make the final distributions to the beneficiaries only when you are certain that all liabilities have been received and paid. If you make complete distribution too early and an unexpected obligation such as taxes or a medical bill surfaces after such distribution, you will likely have a difficult time retrieving funds back from the beneficiaries to pay those expenses. If you distributed all of the trust assets without paying all of the creditors, you may be held personally liable for the shortfall.

Learn more about administering an estate with step by step directions, checklists and forms from Dean Hanewinckel's E-Book, What To Do When A Loved One Dies - A Survivor's Guide. You can order it at http://www.floridaprobatesecrets.com. Dean Hanewinckel is a probate, estate and legacy planning attorney in Southwest Florida. He is the author of 3 books. In addition to What To Do When A Loved One Dies, he has published Manifest Your Legacy and The Official Snowbird's Guide To Becoming A Florida Resident, both available at Amazon.com.

What You Don't Know About Your Estate Planning Could Hurt You!

Estate Planning is the process of looking at one's financial situation, preparing a plan for how income and property will be handled if a person should become disabled or die, and signing legal papers to implement the plan.

Most people are concerned about what will happen to their property when they die. If a person does not decide who should inherit from them and sign the appropriate legal documents, the law will "fill in the blanks" and make the decision for them. Under Illinois law, if a person dies without a will, or without some other legal mechanism for designating who will inherit from that person - such as naming a beneficiary on a bank account, insurance policy, or in a trust - that property will go to family members called "legal heirs."

For example, under Illinois law, property will go to the husband or wife of the deceased upon death, unless the deceased also has children, in which case only 50% goes to the husband or wife, and the other 50% is divided among the children. If the deceased person has no husband or wife, 100% is divided equally among the children. If the deceased person has no spouse and never had any children, the property goes to the parents and brothers and sisters, in equal shares. There are other legal rules governing who will inherit if certain family members died before the deceased person, or if none of the relatives listed above remain.

What Is a Will?

A will is a written statement directing who will wrap up the financial affairs, and who will receive someone's money and other property when the person passes away. The property left in the deceased's name at the time of death is called the "estate." The people named in the will to receive property upon the decedent's death are called "legatees." They may or may not also be the "legal heirs."

What is a Living Trust?

A "living" or "intervivos" trust is one that is set up and funded while the grantor is alive. Usually the grantor names himself or herself both trustee and beneficiary. In contrast, a trust which comes into being under the terms of a will, after the grantor's death, is called a "testamentary" trust.

One might set up a living trust to provide for a smooth transition to another trustee or beneficiary upon his or her death or incapacity. If the beneficiary of the trust dies, the property in the trust can pass to another beneficiary without the need for probate court proceedings. A living trust can also help avoid the need for appointment of a guardian. Where the grantor/trustee becomes incapacitated, a successor trustee can take over management of the trust.

What are Guardianships?

Parents or other family care givers may worry about who will care for, and protect, disabled children or adults, when the parents are no longer able to do so, either due to death or any other event which renders them unable to continue in their role as protector and/or care giver. It is especially important to assure that someone who has the knowledge, experience, and motivation, to adequately identify the disabled person's needs, and to find, and arrange for, the services necessary to meet those needs, can step in when needed.

Kerry R. Peck is an estate planning attorney and the managing partner of the Chicago Estate Planning law firm Peck Bloom, LLC. Kerry concentrates his practice in Trust and Estate Litigation, Estate Planning/Administration, Guardianship and Fiduciary Litigation, and Elder Law. His clients include families, hospitals, banks, the State of Illinois, County of Cook, and City of Chicago.

Pet Trusts - What is a Pet Trust?

You've included provisions in your will for your children, and you know that the estate or trust that you're leaving behind will continue to provide for them after you are gone. But have you considered who will provide for your loving animal companion?

Traditionally, parents have made provisions for the long-term care of their children through careful estate planning and trusts. Recently, there has also been a growing trend towards creating trusts to benefit and protect the interests of pets. As a pet owner, you know that there is an incredible bond shared with your pet. You want to be assured that your pet will continue to receive the proper care and attention that you have always provided, even when you are no longer able to take care of them yourself. A pet trust provides this peace of mind and makes sure that your pet will be taken care of should you become disabled, or after your death.

California pet owners are allowed to create a trust that provides for the care of a domesticated animal if the pet owner were to become unable to care for the pet. As a matter of fact, recent legislation has been passed that further protects pets and guarantees that, as a pet owner, your specific instructions for the care of your pet are carried out, as intended. "Pets are an important part of the American family," California Senator Leland Yee said. The new California pet trust law "will make pet trusts enforceable and assure that the wishes of owners are respected."

In California, this is a legally enforceable method you may use to ensure that your pet receives proper long-term care in the event of your death or disability. With a pet trust, you are able to appoint a caregiver for your pet, and you can designate a portion of your estate directly for the care of your animal, providing a specified sum of money for day-to-day care and feeding, pet insurance, veterinary costs, or other related expenses.

As a pet owner, you want to ensure that your pets can be taken care of should you become unable to provide for them yourself. If you are an owner who wants to establish a trust, or otherwise provide long-term care for your pet, a qualified California estate planning attorney who has experience creating pet trusts in California will be able to help you understand your pet trust planning options, and will be able to assist you in designing a trust that meets your needs and those of your pets.

Kevin Von Tungeln is the Managing Partner of EstatePlanningSpecialists.com and Thompson Von Tungeln, P.C. Kevin practices exclusively in the areas of estate planning, probate, wills, conservatorships and trust administration. Visit EstatePlanningSpecialists.com to learn more.

Will And Estate Planning

The will and estate planning are interrelated with each other. Because the type of estate trust completely depends on the formulation of the will. While planning any estate before the estate attorney, the primary step is to compose the will and relocate the monetary distribution in that will. The process of this typer of asset planning requires the person who wants to plan his estate, his descendant, the estate-planning attorney and most crucial his will.

In the primary stage of the legal planning, the estate-planning attorney communicates and confirms the whole background of that person. While analyzing his character, the attorney understands the monitory condition of that person, his monitory assets, real estate and private estate. Also the attorney make clear the clients aspirations about his family members and also gets information about the necessities of client's adorning family members after the death of the client.

Also one of the vital parts of the will and estate planning, the attorney elucidate from the client about his goals and future aspirations about the estate and also reveals about the health related desires from the client.

Before making the will and estate trust, the attorney will display and describe various alternatives, which is obtainable to the client. He assures the client that such asset protection planning will work thoroughly with you and it is a perfect match for future expectations of the client towards his family members after his death.

The suggested estate protection by the attorney is completely in reference to terms and conditions in the will and in accordance with the desires of the clients about his wealth. So while making the will and estate plan, the attorney mostly gives emphasis to the monitorial security of the client's family after his death, secondly more weight age on the equal distribution of the wealth as it is mentioned by the person in the will and thirdly physical requirements of client and his family members.

While making the will and estate plan, the attorney mentions some rules, regulation, and strategy to save the estate. He suggests some precautionary measures to put aside the family members from financial problems like taxes, family budget and other household expenditure.

After giving suggestions, guidelines and confirming all the requirements of the client for will and estate, finally he will carry out all essential living trusts documents, papers of will, documents of powers of attorney and testamentary trusts. Also in some cases, the attorney himself consults with expert accountant or tax consultant to secure the client from allegation of negative tax.

Allan Wilson owns and operates http://www.estate-trusts.com where you can find more important information about estate planning. Estate Trusts

49 Reasons To Use A Land Trust

1. Avoids property being probated (out of court transfer upon death of beneficiary)

2. Ease of Transferability (Documentary stamps may be avoided as well as title insurance)

3. Judgments against the beneficiary do not attach to the property (This allows an individual with judgments and or liens to buy and sell real estate freely without having to worry about those judgments or liens attaching to the property).

4. No Partition (avoids spouse's "forced share" sale buyout upon divorce)

5. Easier management with multiple owners (multiple owners do not have to sign docs)

6. No costs upon transferring beneficiary

7. No registered agent needed

8. Legal and Equitable property interest in trustee's name

9. Income and Expense conduit, not a business with tax consequences

10. No tax return to file (pass thru entity)

11. Trustee has no personal liability

12. No annual fees like other entities (if trustee is an individual or friend)

13. Estate planning - successor beneficiaries

14. Avoids state sales tax on transfers (in most states)

15. Avoids the due on sale clause

16. Privacy of ownership

17. Keep sales price private

18. Able to fracture interests of multiple owners w/o being partners

19. Ease of linkage to other asset protection entities

20. Non-judicial repossessions of real estate sold on installment contract

21. 1099 not required for transfers (personal property not subject to real estate regulations)

22. Ease of operating across state lines

23. Ability to insert poison pills

24. One Hundred Years of case law to support land trust usage

25. Many attorneys do not study this section of the law - not profitable for them

26. No recordation of the Trust Agreement

27. To avoid "seasoning" problems (secondary market rules of ownership)

28. To save title insurance premiums (Trustee is the insured)

29. Good negotiating technique in the sale/purchase of property

30. To provide non-recourse financing

31. Stabilizes real estate taxes (prevents re-assessment)

32. Avoids state regulations that apply to corporations and LLC's

33. Using the Beneficial Shares as collateral for a loan (makes for quick borrowing)

34. Protection from Title Claims (claims limited to the trust)

35. Helps avoid Identity Theft of your name and signature

36. Makes contracts "assignable"

37. Protection from Homeowner's Association Claims

38. Helps keep the Title clear of defects

39. Can use Beneficial Interest as Collateral

40. Good structure for doing business with others without using your personal name

41. Land Trusts and Corporations

42. No Personal Credit Reporting

43. Aides with Strategic Foreclosure

44. Ease of Management in the Event of Conflict (allows for buyout provisions)

45. Estate Planning Tool (transferring of Beneficial Shares)

46. Ease of Managing the Disability of the Trustee or Beneficial Owner(s)

47. The Beneficiary' Interest Can be Used as Collateral for a Loan

48. Save money on State Income tax

49. Land Trusts create a lot of uncertainty

As you can see, Land Trusts are a wonderful tool for you to hide your assets, avoid real estate tax increases, privatize your sales transactions, avoid probate and use for many other benefits. Now you have a BASIC understanding of why people use Land Trusts. Are you working hard to acquire assets? You will spend a life time building your financial estate... spend a little time and money learning how to protect your net worth from the deadbeats and their contingency fee lawyers!

Randy is a full time real estate investor who purchased his first rental house in 1969. He has purchased over 200 houses and teaches other investors how to put their properties into Land Trusts for privacy and asset protection. Randy is a national teacher, author and mentor. Randy writes the only Land Trust Newsletter in the county and is the founder of the Land Trust University (an institution that teaches real estate investors how to set up and administer their own Land Trusts). Residing in Illinois (the granddaddy state of Land Trust Law), Randy knows more about Land Trusts and how to link them to other entities than anyone else in the America today. You can reach Randy at: http://www.realestateforprofit.com or call him at 866-696-7347. You can also follow Randy on Twitter (landtrustexpert) and Facebook (realestateforprofit)

Land Trusts Made Simple 101

Illinois was the first state to create land trusts and is the reason other states sometimes refer to such trusts as "Illinois land trusts." Florida, Indiana, South Dakota, Virginia, and Hawaii are among the other states that recognize land trusts by statute. Many other states recognize the validity of a Land Trust but do not have specific statutes authorizing their use.

Ultimately the property itself can be reached in a lawsuit (even with an out-of-state trustee), but your plan should be to stay as far away from the eye of the storm as possible so they do not reach any of your other assets. A judgment lien levied against your individual 10 unit building is one problem. But, a judgment rendered against you--in your personal name, is a much worse situation.

The next important piece to the land trust puzzle is the DIRECTOR of the trust. When a deed is prepared conveying a property into a land trust, the deed must state that the trustee is merely holding title to the property without any rights to mortgage, lease, convey, exchange, option, barter, etc. Without written direction from the beneficiary or someone he has appointed, the trustee cannot act and nothing can happen. However, if the beneficiary designates a director to act on his/her behalf, then the fun begins.

The length of tenure and limits of authority can be restricted for the director in the land trust agreement, thus insuring no abuses would occur. After the term of the director has expired, the power of direction can automatically pass to the SUCCESSOR DIRECTOR or revert back to the original beneficiary. It is important to maintain a director for your trust if you want "control" of your trust out of your hands and in the hands of someone you can trust.

It is possible for one person to be all of these people: trustee, beneficiary, and director. Hopefully by now you can see the disadvantage in such a structure.

Oftentimes lawyers recommend that the trust be named after the owner such as, THE JOHN DOE LAND TRUST and that the owner fill all the positions mentioned above. If your lawyer suggests this, get a different lawyer (preferably one that has actually studied Land Trust law longer than one hour).

Your director should be chosen as carefully as your trustee. Again, if you have developed friends that understand "the program", you can all help each other and accomplish the privacy you are seeking. Once you begin to understand land trusts you will discover that you really do not even need to name a trustee when forming a trust. You can just give the trust a name (what's in a name?--see below) and "wing it" until such time as you need to deed the property back out of the trust. But, this is a whole other subject too lengthy for this report.

Again, your director should ideally be located in a different state (and use a P.O. Box address) than the rest of your "group." If this is not possible at least select your director from another city than yours. All of these positions that we are discussing should have successors listed in your trust agreement to insure the orderly passing of power, according to your desires.

It is extremely important to keep the trustee and the director legally separate. The trustee should never do anything with the trust assets unless directed to do so by the director through a Letter of Direction. If you don't have confidence in a single director, you can create a Board of Directors. Thus you can require a majority vote before any action is taken (direction given to the trustee).

You might select some relatives and some non-relatives to serve as co-directors. Or you might put some of your heirs on the board of directors to initiate them into the world of land trusts (so they will be familiar with the subject matter when it is their turn to "take over the reigns").

Whatever you do, be sure that you can trust your director(s) implicitly and select someone who is of a like mind as yours. If no such person is available to you, then you can be the director of your own trust. The appointment of a director is a private non-recorded act that need be publicized only when made necessary by an act of the beneficiary (you). So you can still retain control in a very indirect way.

States have different laws when it comes to the use (and abuse) of Land trusts, but Illinois is by far the Granddaddy of them all. Illinois actually developed the modern day "land" type trust from English common law; however, specific statutes in other states permit the existence of land trusts.

When properly drafted, land trusts can be used in most all states. However, some states are smarter than others so, check your own state laws. For example, in some states you can avoid the transfer tax levied on real estate transactions by placing your property into a land trust and then selling the beneficial interest in the trust. But, other states have passed laws requiring notification of the taxing bodies if even a part of a beneficial interest is transferred (i.e. Illinois).

This way they can not only charge you a transfer tax, but also increase your real estate property taxes as a result of the new sale price. Fortunately no state has yet been able to figure out a way to tax the sale of an OPTION on a beneficial interest. Options are extremely private transactions and will be addressed in future reports.

When financing property held in trust, a commercial lender will (if they are smart) require an assignment of the beneficial interest and an assignment of the power of direction. This effectively gives the lender control of the property and prevents any funny business by the beneficiary. Obviously, dealing with a commercial lender violates your confidentiality as the beneficiary.

Although by having your trustee sign the note and mortgage (and you just signing the assignment forms and guarantee), you at least will not have your name published in the local county recorder when all the documents are filed. In other words, no one will know that the property is yours and that you are placing financing on it.

One of the most important concepts to place in your land trust agreement is the restriction on your trustee to never reveal the name(s) of the beneficiaries nor their locations. You can also prevent the trustee from revealing the location of the beneficiaries or releasing a copy of the Trust Agreement without written permission of 100% of the beneficiaries, or a written court order that contains an indemnification clause protecting the trustee from a lawsuit for "breach of trust."

Now, if too much pressure is put on your trustee, his only alternative is to resign as your trustee--thus keeping your confidentiality. Furthermore, if your trustee is out of state and only has a P.O. Box for an address, it is going to be very difficult to find him to begin legal proceedings.

It is not illegal to operate under a "fictitious" name. Just fill out a simple form at your county court house and viola--you're someone else! Imagine that your trustee is operating under a fictitious name and your trust is operating likewise. This will drive the process servers crazy!!

Randy is a full time real estate investor who purchased his first rental house in 1969. He has purchased over 200 houses and teaches other investors how to put their properties into Land Trusts for privacy and asset protection. Randy is a national teacher, author and mentor. Randy writes the only Land Trust Newsletter in the county and is the founder of the Land Trust University (an institution that teaches real estate investors how to set up and administer their own Land Trusts). Residing in Illinois (the granddaddy state of Land Trust Law), Randy knows more about Land Trusts and how to link them to other entities than anyone else in the America today. You can reach Randy at: http://www.realestateforprofit.com

Or, follow Randy on Twitter.com at "landtrustexpert"

Administration Of A Probate Or Trust Estate - Selling The Decedent's Real Estate

As a Trustee of a decedent's trust or as a personal representative or executor of a decedent's probate estate, you may be required to sell the decedent's real estate. In doing so, you will be confronted with legal issues and requirements as well as practical issues. I will address both in this article.

If the decedent or his trust owned real estate at the time of his death, then you, as personal representative or trustee, first have an obligation to secure and preserve the property. If someone is residing at the property, you need to determine whether that person has the right to be there. If not, you have an obligation to act in the best interests of the beneficiaries. This may mean filing a suit for eviction or using some other legal means to gain possession of the property. You are also responsible to make sure that the property is properly insured. The insurance company or agent should be notified of the decedent's death because the vacancy of the property may affect the terms of the coverage. Once these issues are resolved you can then concentrate on the disposition of the property. The procedure for disposing of real estate will differ based on whether the property is held in trust or as part of a probate estate, but many of the fundamentals will be the same for both.

Disposition of the Property.

How you are to handle this disposition of real estate is determined by the terms and provisions of the Will or Trust you are administering. There are a variety of these types of provisions contained in Wills and Trusts. The following are some of the more common examples:

1. Sell the property and distribute the proceeds.

Occasionally the decedent will direct that the trustee/personal representative/executor ("administrator") sell the real property and distribute the proceeds among certain beneficiaries. In this situation the administrator would have authority and be responsible for the sale of the property. This would include the preparing of the property for sale, marketing the property (with or without a real estate broker), negotiating the contract and closing the transaction.

After the sale is completed, the administrator will distribute the net proceeds to the beneficiaries (after deducting the cost of marketing and sales, including the closing costs, taxes and other expenses) according to the terms of the Will or Trust.

2. Transfer the property directly to a beneficiary or beneficiaries.

The first step is determining how the property is titled. I have represented trustees who believe that a parcel of real estate was titled in the name of the trust he was administering. When we searched the title, we discovered that the decedent never transferred ownership of the property from his own individual name to that of the trust. As a result the property was a part of the decedent's probate estate.

Selling a Decedent's Property.

The sale of probate property or other property of a decedent has its own unique issues. In many cases the success of a sale depends on the closing occurring in a timely fashion. It is important that the personal representative have the authority to sell the property as early as possible. If the will contains a power of sale, the personal representative is authorized to sell the property upon being appointed by the court. If a decedent dies intestate or executes a will with no power of sale, a personal representative may sell real property only with the authorization or confirmation by the court. No marketable title passes until the sale is authorized or confirmed by the court. In any case, the proceeds of the sale cannot be distributed to the beneficiaries until after all of the decedent's debts have been paid.

The Contract.

The most important document in any real estate transaction is the contract for sale and purchase. It is the blueprint of the transaction. All of the items you negotiated with the buyer should be included in the contract. Because of this, it is extremely important that the contract be drafted to clearly express the full intent of the buyer and seller. If a point you negotiated is left out of the contract, it is likely you will not be able to enforce that point.

Real estate transactions in most states are subject to the Statute of Frauds which means that all agreements for the sale of real estate must be in writing. The writing does not have to be a formal contract. There are many cases where letters, notes, memoranda and other writings have formed an enforceable contract. However, to have a clear understanding of your intent and the intent of the seller, it is best to state the agreement in a single properly prepared contract.

Learn more about administering an estate with step by step directions, checklists and forms from Dean Hanewinckel's E-Book, What To Do When A Loved One Dies - A Survivor's Guide. You can order it at http://www.floridaprobatesecrets.com. Dean Hanewinckel is a probate, estate and legacy planning attorney in Southwest Florida. He is the author of 3 books. In addition to What To Do When A Loved One Dies, he has published Manifest Your Legacy and The Official Snowbird's Guide To Becoming A Florida Resident, both available at Amazon.com.

Pet Trusts - How Does a Pet Trust Work?

When hotel heiress and billionaire Leona Helmsley died in 2007, her pet Maltese, Trouble, became the beneficiary of a $12 million pet trust that Helmsley had established as part of her estate plan. Mrs. Helmsley cared very deeply for her animal companion. Although she left money in her will for Trouble, she failed to secure a legally enforceable pet trust to ensure that her beloved Trouble would be provided for even after her death.

Most pet owners won't have the resources available to provide for their pets to the extent that Mrs. Helmsley did. In fact, according to Lawyers Weekly USA, the average amount left to pets is closer to $25,000. But, like Mrs. Helmsley, most pet owners are concerned about providing long-term care for their pets, and want to make sure that their wishes are carried out in the event of their death or disability.

As a pet owner in California, you can create a pet trust that will provide for the care of your "beloved pet" when you are no longer able to care for the pet yourself. Pet trusts are more secure than simply leaving money in your will, and provide specific instruction for the caretaker and beneficiary of the trust. To begin planning for the care of your pet, you should identify a family member or friend who you would trust to care for your pet and who would be willing to provide for the animal's care. A pet trust allows you to designate this trusted person as your pet's trustee. In California, your trustee will be legally obligated to make arrangements for the proper care of your pet, according to your instruction. They will also hold the money and/or property that you transfer to the trust for the benefit of the pet. In addition to the pet's trustee, you may also designate a caregiver, or beneficiary, who will be responsible for caring for the pet over the lifespan of the animal.

Because California pet trusts are legally enforceable arrangements, as a pet owner, you can be assured that the instruction you provide regarding your pet's care will be carried out. A trust can be very specific, so it is important to discuss your pet's health needs, care, and routine with your designated caregiver. For example, if your cat is allergic to a particular brand of food, or your dog needs to be bathed once a week, this can be specified in the trust agreement.

As a pet owner, you know your pet's particular habits and needs better than anyone else. With a pet trust, you can describe the kind of care your pet should have, and you can list the trusted people who would be willing to provide that care. If you are a pet owner who wants to establish a pet trust, or otherwise provide long-term care for your pet, a qualified estate planning attorney who has experience creating pet trusts in California will be able to help you understand your pet trust planning options, and will be able to assist you in designing a pet trust that meets your needs and those of your pets.

Kevin Von Tungeln is the Managing Partner of TVTTrustLaw.com and Thompson Von Tungeln, P.C. Kevin practices exclusively in the areas of estate planning, probate, wills, conservatorships and trust administration. Visit http://www.TVTTrustLaw.com or call (661) 945-5868 to learn more.

Think You Don't Need Estate Planning Because Everything is Owned Jointly?

I can't tell you how many people tell me that they are not worried about estate planning because they own everything jointly with their spouse, so it doesn't really matter.

WRONG!

Here are a few reasons why that kind of thinking costs thousands of dollars (at least):

1. What if you both die at the same time?

If you and your spouse die in the same accident and you have no planning in place, you're looking at spending a heck of a lot in probate fees. We estimate right now that probate costs approximately five (5) percent of your gross estate value. So (to give a little perspective) if all you own is a house worth $500,000, you're paying $25,000 to the court and your personal representative, possibly more when you take attorney's fees into account.

And that's not all. If you have minor children when you die without any planning in place, your kids are each going to get their share of inheritance when they turn 18. Yes, the law requires this! The law also does not discriminate with age when it comes to inheritance. So, your 20-year-old son and your 2-year-old son will inherit the same amount of money! Not what most parents would have wanted.

2. You could miss out on certain tax advantages only afforded married couples.

When you plan for death with joint ownership, what you effectively do is delay tax payment. What you lose when you plan this way is the tax benefit that married couples are afforded. Each person has a certain tax exemption when it comes to paying estate taxes ($3.5M for 2009, No tax in 2010, then $1M in 2011 and beyond). But with joint ownership planning, you lose one of those exemptions all for the sake of delaying payment. Each married couple should be planning for two tax exemptions. It might not be worth it in your case to lose that all for the sake of delaying any payment.

3. Your assets are not protected after your death.

If you die before your spouse and own everything jointly, you're leaving an unprotected estate to your spouse and kids. If your spouse has creditors, they can reach all of the estate. If your spouse remarries then divorces, he or she may lose some of your estate to the ex. Or, if your spouse remarries and dies, there's no guarantee your kids will see any of that inheritance. Even if your spouse doesn't remarry, if he or she doesn't do any further estate planning, after his or her death, your children will receive their inheritance outright and unprotected. So, your child's creditors or ex-spouse may have a claim to it.

4. You lose the benefit of stepped-up basis.

Many married couples don't plan for taxes, maybe because their estate is not taxable for estate purposes. But what happens when one spouse dies and the survivor needs or wants to sell the family home to pay for new expenses or just to downsize?

Normally, when you sell property, you are taxed on the gain - the difference between the sale price and the "basis" price (usually the amount you paid for the property). When people own property as tenants by the entirety or as joint tenants with right of survivorship, they receive a stepped-up basis on half the property, but retain the same basis on the other half.

Here's an example based on one from the book The Living Trust, by Henry Abts. (The book is really written for non-lawyers to understand the benefits of planning with a Living Trust.)

A couple buys a piece of land for $20,000 and holds title as Tenants by the Entirety. By the time the wife dies many years later, the property is worth $1,000,000 because they built their dream home on it and it's in a great location. The husband's half of the property retains a $10,000 basis, but the wife's receives a stepped-up basis at her death - $500,000. So, let's say that the husband decides that he can no longer live in this beautiful house that he and his wife built together and spent so many happy years in. He sells it for $1,000,000. With a basis of $510,000, his taxable gain is $490,000. However, he does still get the personal residence exclusion of $250,000, so his taxable gain is $240,000. At 15%, husband would pay $36,000 in taxes.

By contrast, had the couple put their home into a community property living trust, the home would have received the entire stepped-up basis at the time of the wife's death, and the husband would have had no taxable gains.

(By the way, the situation is even worse if the husband had decided to rent out the home for a few years before selling it, because he couldn't have claimed the personal residence exemption, but this would have been a non-issue if the home had been held in a living trust.)

(Another by the way: A living trust is especially necessary when you have multiple properties, because you can only claim one as your personal residence for the exemption.)

Planning with a Revocable Living Trust is a far better way to go. You retain lifetime control over your assets, but leave a much cleaner situation for those you leave behind.

Candice N. Aiston is a Mom and Personal Family Lawyer®. She takes her clients by the hand and walks them through every legal and practical step necessary to protect their families and to make sure that their voices are always heard, no matter what happens. To download a copy of her free report, "The 9 Planning Mistakes Parents Make," please visit http://www.candiceaistonlaw.com

Using Seller Carry Back Trust Deeds to Buy Real Estate

Seller carry back trust deeds are mortgages financed by the seller. In today's real estate market, many buyers find it difficult to qualify for a home loan due to poor credit or insufficient down payment funds. Entering into a seller financed contract allows them to buy property while working to improve credit scores.

Seller carry back trust deeds are used to secure the transaction just as a mortgage note does through a bank. Sellers can finance all or part of the purchase price. When partial funding is offered, borrowers must obtain remaining funds through a financial institution or hard money lender.

When property owners carry financing a real estate contract must be executed, along with property transfer records. Three parties are involved with mortgage trust deeds and include the Trustor, Trustee, and Beneficiary.

The Trustor refers to the seller. Beneficiary refers to the person who receives income from the mortgage note and can include the seller or mortgage financier. The Trustee is the person holding legal title to the property. In many cases, the seller wears all three hats. It is the responsibility of the beneficiary to collect payments from the borrower.

Owner financed mortgage deeds are secured with a promissory note. The deed is submitted through the court to record a lien against the property. The real estate is used as collateral. Once the loan obligation is fulfilled the Trustor transfers legal title to the buyer. If the borrower defaults on loan installments, the Trustee can initiate foreclosure action.

Trust deeds can be a good option for credit-challenged buyers, as well as real estate investors. However, anyone engaging in this type of financing should have contracts drafted by a lawyer to ensure documents are legally-binding and protect both parties in the event of default.

Both parties should engage in due diligence by conducting background and credit checks, obtaining appraisals and inspections, and verifying the property is owned by the seller. If the property owner holds a mortgage note against the home, buyers must be vigilant about verifying that the loan is in good standing.

There have been instances of sellers offering lease options and trust deeds on preforeclosure homes. Once properties fall into foreclosure, the buyer must negotiate with the bank to purchase the home. Otherwise, all vested funds could be lost.

Owner financed contracts generally last between two and five years. Buyers must strive to establish or rebuild credit in order to refinance the loan once the contract expires. Some owners require buyers to provide a down payment. All payments must be carefully tracked and reported to the IRS. It is strongly recommended to consult with a tax professional to determine tax benefits, deductions, or penalties which may be assessed with real estate trust deeds.

Last, but not least, take time to do your homework before entering into seller carry back contracts. While most property owners are honest, there are some who are only out to make a quick buck and will eventually sell the note to another buyer. This could lead to serious consequences for the buyer.

Talk to trustworthy investors or real estate lawyers to gather the facts. Weigh the pros and cons to determine if owner financing is in your best interest. Investigate and research before making a final decision. Rushing into any home buying deal could be a costly mistake. Don't become a victim of foreclosure because you want a house so bad you're willing to do anything to get it.

Author and California real estate investor, Simon Volkov provides valuable information regarding seller carry back trust deeds and creative financing strategies to help buyers make informed choices. His article library includes home buying tips, foreclosure prevention, credit repair, personal finance, and investing information available at www.SimonVolkov.com.

Using an Estate Trust to Avoid Probate

A trust is used to protect valuable inheritance assets and quickly settle the estate. Property placed inside the trust can be distributed to designated heirs within a short period of time. Depending on the type of assets, inheritance property placed into the trust may be exempt from inheritance taxation.

Placing estate assets into a trust is the only way to avoid probate. The duration of probate can extend for a few months or a few years, depending on if decedents engage in estate planning strategies prior to death.

Several reasons exist for placing inheritance property into a trust. The first is ease of distribution to heirs. The second is exempting items from taxation. The third is to avoid probate and the fourth is to keep estate matters private.

Decedents' last will and testament is a matter of public record when the estate must endure the probate process. The information contained in the Will can be used by investors who buy probate property. Those who prefer to retain their privacy should consider placing inheritance property into a trust.

Establishing a trust is a relatively easy process. However, ensuring the trust is properly executed requires assistance from a professional estate planner or attorney. A variety of trusts are available, but the most common include life insurance trusts, testamentary, revocable and irrevocable trusts.

Most people can establish their trust within a day. The first step involves choosing an estate planner to assist through the process. A good place to start is by asking family or friends for a referral. Banks and credit unions often offer estate planning services at discounted rates for customers. Estate planners can also be located in phone directories.

Establishing a trust can also help prevent family disputes surrounding distribution of inheritance property. Death can cause people to become emotionally distraught and act in inappropriate ways. Family members who feel they have been cheated out of valuable property, or those who have been disinherited, often go to extreme lengths to acquire items they feel entitled to. Although placing items into a trust does not provide an ironclad guarantee that prevents heirs from contesting the Will, it does minimize the risk.

When scouting out estate planners, it's best to work with someone you feel compatible with. Estate planning is a personal task that can sometimes be emotional. After all, you are planning for arrangements of your death and making important decisions regarding who will receive everything you have worked your entire life to acquire.

Estate planners and probate attorneys often offer complimentary consultations to evaluate needs and discuss fees. It's smart to consult with at least three professionals to determine which is best suited for your needs.

Trusts can be customized to suit your needs. Each type of trust has its own set of unique features, but all are comprised of four basic elements.

1. The person establishing the trust is known as the Grantor

2. Trusts are managed by a Trustee

3. Trusts have a Principal

4. Trusts have Beneficiaries

In order to transfer inheritance assets into a trust, Grantors must create a detailed list of property, along with property appraisals and legal titles for automobiles, real estate, and other titled property.

The principal refers to money used to generate income for heirs. Trustees are allowed to use principal funds for estate-related expenses or investment purposes. If investment products are used to generate dividends, the proceeds must be used for future investments.

Beneficiaries refer to individuals designated to receive inheritance property. Grantors can bequeath property to whomever they desire, but most gift assets to their spouse, children, parents, or siblings.

Trusts are normally reserved for estates valued at $100,000 or more. Individuals whose estates are valued at less can engage in estate planning strategies which allow them to avoid probate. Estate planning is one of the best gifts anyone can leave their loved ones. Working with an estate planner or probate lawyers can ensure you develop an ironclad trust and prevent family disputes.

Learn how to establish a trust or incorporate estate planning strategies to avoid probate from real estate investor and probate liquidator, Simon Volkov. His website includes a comprehensive probate and trusts article library, along with valuable estate planning resources at www.SimonVolkov.com.

Pet Trusts - Funding a Pet Trust (Part I)

For some pet owners, the question is not whether to create a pet trust; the consideration of who will care for their animal companion when they are no longer able to do so leaves a pet trust to be the only viable alternative. The questions for many, however, are when to fund the pet trust, and the amount of funds that should be left for their pet's care. The answers to these questions are rarely the same from one individual to another, as the timing and amount of funding for a pet trust depends upon the type of pet trust created, and the size of the estate owned.

If you create an inter vivos trust (or "living trust") for your pet, the funding must immediately follow in order for the trust to take effect. There are several ways to achieve this: among them being direct transfer of money or property and creation of a life insurance policy with the trustee (your pet) named as the beneficiary. For California pet trusts, both methods are viable, and both should take place under careful consultation with a pet trust attorney who understands the specific statutes related to the creation and funding of pet trusts in California.

Direct transfer could be as simple as writing a check to the order of: [name of trustee], trustee of [name of the pet trust]. The check will be cashed, and will be ready for your pet immediately, should you become unable to care for your pet on your own. However, direct transfer could also mean more complicated legal procedures, such as transferring land or other owned property, with the trustee as beneficiary. In such cases, a qualified California pet trust attorney will oversee the transfer of property, including preparation of a deed.

You may also fund a pet trust under a provision in your will. This includes the specific naming of property, and the amount of the sale of such property that would go toward funding the pet trust. A pet trust attorney will be able to counsel you regarding the best way to assure that the part of your estate that you use to fund the pet trust will be adequate for the proper care and well being of your pet.

The laws regarding estate planning and pet trusts are constantly changing in California, and can be difficult to navigate on your own. Consulting a pet trust attorney with experience in creating pet trusts in California could help you clarify your own understanding of these legal processes, and help you determine the best way to proceed in assuring the lifelong happiness and care of your beloved pet.

Kevin Von Tungeln is the Managing Partner of TVTTrustLaw.com and Thompson Von Tungeln, P.C. Kevin practices exclusively in the areas of estate planning, probate, wills, conservatorships and trust administration. Visit www.TVTTrustLaw.com or call (661) 945-5868 to learn more.

Understanding Mexican Real Estate Trust Agreements

For the past 15 years, Cancun has thrived as one of the most desired overseas real estate investment and relocation hotspots for North American second home buyers. In recent years, the dream of owning property along the Yucatan Peninsula has also become increasingly attracting European investors.

Many buyers making their initial enquiries into the tropical paradise become confused when trying to understand the Mexican real estate trust agreements, otherwise known as a Fideicomiso. The processes involved in acquiring Mexican real estate are relatively straight forward, yet a little bit of initial knowledge can go a long way in comprehending the regulations relating to the purchasing processes.

As Cancun and the majority of the most sought after investment and relocation areas of Mexico are located along the coastal regions, they also fall into restricted zones. While previous to 1994 foreigners were not able to purchase real estate in Mexico, the changes in the law to attract foreign investment were accompanied by the zoning restrictions. Areas of Mexico falling into these restricted zones include any land within 50km of the coastline, or 100km of the country's borders.

A Fideicomiso trust agreement is required when purchasing property within the restricted zones. The trust agreement enables the equivalent of a title deed ownership, authorised by the Mexican government. The trust agreement is set up by a Mexican bank acting as a trustee, with a validity of 50 years.

The foreign buyer becomes the beneficiary to the trust, enjoying full ownership rights such as the ability to re-sell, rent, mortgage and inherit. The bank acting as the trustee is legally obliged to respect the buyer's full rights and follow any instructions provided by the benefactor.

Regulations by the Mexican government ensure that only selected banks are authorised to hold the real estate trusts, where full examinations of the legal paperwork for the properties are carried out prior to completing the purchase. Upon expiry of the Fideicomiso, if not automatically renewed, the benefactor retains full rights to all the profits resulting from the use or sale of the real estate.

Since the granting of permission for foreigners to purchase real estate in Mexico's restricted zones, the demand for properties has sharply increased. Long established as a preferred holiday destination, the attraction of foreign investment for boosting the Mexican economy has lead to relaxing the laws towards real estate ownership. Real estate developments have been increasingly modified to comply with the demands of foreign buyers, with luxury properties constructed to typical US criteria becoming standard constructions.

When planning to purchase property in Mexico, the use of a legal representative familiar with the local processes is vital for ensuring full understanding of the processes involved. Continued demand is seeing capital gains continuing to grow, with rental demand providing exceptional returns in sought after areas of this year-round destination.

Property Investing Overseas [http://www.propertyinvestingoverseas.com] provide extensive experience dealing with and on behalf of investors throughout the world, offering unbiased information on portfolios and international markets. Our experience within the global property sector enables us a prime position for identifying professional agents and developers, ensuring our clients receive full knowledge prior to entering any property investment purchase with our collaborators. Visit our partner site at Property Investing Mexico [http://www.propertyinvestingmexico.com].

Land Trusts - Myths and Misunderstandings

ISSUE: My lender will not let me close my deal using a Land Trust (LT)

TRUTH: This depends on if you are using borrowed funds from a lender that must qualify you in the secondary market. If you must meet secondary market guidelines it is true that you must close the deal in your name, but you can put the property into a land trust the day after closing. Once you have 10 secondary market loans (the maximum allowed) you must use a portfolio lender and they will let you close using your land trust.

ISSUE: Do I have to get a tax ID number for my LT?

TRUTH: The answer is no. Nor do you have to register your Trust Agreement with anyone.

ISSUE: You can't do a Short Sale using a LT

TRUTH: False. You can and I have and there are many advantages to using a LT for this type of transaction.

ISSUE: Is it true that I must record my Trust Agreement to make it valid?

TRUTH: No, and 99% of the time you would not want to record your trust agreement. However, there is that 1% reason that you might want to record.

ISSUE: My attorney says Land Trusts are illegal in my state

TRUTH: This is probably not true. Almost all states recognize the validity of a LT or a similar type entity (Title Holding Trust, Common Law Trust, etc.). My experience is that a vast majority of lawyers do not understand Land Trusts and therefore do not recommend them. Too bad for their clients...they are missing out on 49 Reasons to Use a LT.

ISSUE: If I use my LLC as the beneficiary of a LT I must register the LLC in the state where the property (held inside the LT) is located

TRUTH: Wrong! Many accountants will tell you this, but they are incorrect. The beneficiary of the LT is not "doing business" in the state where the property is located...the LT is...and the LT is not required to register.

ISSUE: Land Trusts are expensive to set up and maintain

TRUTH: Not true. If you follow my advice to put each of your properties into a separate LT and you hire an attorney to do this for you, it WILL get expensive. But you do not need to do this. You can learn how to set up and administer your own LT (as many as you need/want) for only the continuing cost of recording each deed.

ISSUE: Land Trusts must have incorporation papers and the State notified

TRUTH: Wrong again! Land Trusts are not registered like corporations and LLC's on a state-by-state basis (in fact, they are not registered at all...anywhere!). This is one of the many reasons to start your estate planning with a LT for each property you buy.

ISSUE: I was told that my LT must open an account at a local bank

TRUTH: Not true. Since LT's are "pass-thru" entities in the eyes of the IRS you do not need a separate bank account for each Land Trust you form. You can set up an account but you do not have to and you will not have a tax ID number to use so you will have to use your own social security number (or, if your LLC is the beneficiary you might use your tax ID # for your LLC).

ISSUE: It is illegal to hide the ownership of property

TRUTH: I love this one. WRONG! It is not illegal to hold title to your real estate in a LT to hide the ownership. The president of the United States, Barack Obama, owns his home in Chicago, IL in a LT with his attorney serving as the trustee. If Barack can do it, so can you!

ISSUE: Can I buy the Beneficial Interest in a LT without buying Title Insurance

TRUTH: Yes, you can, but I would not advise doing this. I would always get a title policy and have the proper "search" done prior to transferring any funds. You want to make sure that the Trustee has clear title and there are no unknown liens or judgments against the property. You should also obtain a copy of the trust agreement and make sure the Trustee acknowledges EVERYTHING!

This is certainly not a complete list of misconceptions about Land Trusts, but is enough to digest for now. I will write more on this subject in future articles.

Randy is a full time real estate investor who purchased his first rental house in 1969. He has purchased over 200 houses and teaches other investors how to put their properties into Land Trusts for privacy and asset protection. Randy is a national teacher, author and mentor. Randy writes the only Land Trust Newsletter in the county and is the founder of the Land Trust University (an institution that teaches real estate investors how to set up and administer their own Land Trusts). Residing in Illinois (the granddaddy state of Land Trust Law), Randy knows more about Land Trusts and how to link them to other entities than anyone else in the America today. You can reach Randy at: http://www.realestateforprofit.com or by calling him direct at 866-696-7347.

Estate Planning Attorneys - How They Can Help You

Most of us don't put nearly as much though as we should into planning how our estates will be distributed, and the estimates are that nearly two-thirds of Americans die intestate, without having prepared a will. While their estates will eventually be distributed according the inheritance laws in their states, those laws may not reflect at all how they would have chosen to pass on their assets. If you want to avoid that situation, finding a firm of experienced estate planning attorneys is your best answer.

Estate planning attorneys have a comprehensive understanding of the probate process in your state, as well as up-to-the-minute knowledge of estate tax laws. They will help you ensure that your final wishes regarding the distribution of your estate, as well as your health care and life support wishes, are carried out.

Estate planning attorneys can help you regardless of whether you want to draft a simple will for a small estate; to change an existing will so that it reflects a change in your financial status; to establish a living trust; or to set up an estate plan which includes a will, trust, and your health care and life support directives.

Your estate planning attorneys will help you determine, from the existing state of your financial affairs, including your investments, real estate holdings, and personal property, what your estate planning goals should be. They will help you get a realistic picture of the potential needs of your survivors, and elicit a clear understanding of your final health care desires.

With that information, estate planning attorneys can then explain to you the best alternatives for seeing that your estate is handled as you wish. They will not only discuss wills and trusts; they will present options which you can employ immediately to lessen the taxes and probate costs on your estate.

Estate planning attorneys can also advise you as to whether or not any personal changes in you life will require a change in your estate plan. If, for instance, you are widowed or divorced, in you later years, and considering remarriage, you should be aware that there may be consequences for your estate.

Should you remarry late in life, you and you spouse will be responsible for the costs of each other's long-term health care should one of you be placed in a nursing home. Those costs be a significant drain on you, or you future spouse's, assets. For more information on estate trusts and attorneys visit http://www.estatecontractstrusts.com

If you have children from an earlier marriage and intend to remarry, changing your estate plan so that you will include your new spouse among your heirs, there is a possibility of conflicted feelings among your children. Estate planning attorneys can suggest ways in which you can begin to distribute the assets you intend to leave to you children assets among your children during your lifetime without it causing tax consequences.

Estate tax attorneys will draft and execute all the legal paperwork, including your will, living or testamentary trust, health care directive, and powers of attorney which are necessary to carry out you wishes. They will also do the research needed to make sure that the tax consequences to your estate are minimized, consulting with tax experts if needed.

Article by Dean Forster at http://www.estatecontractstrusts.com Learn more about estate planning protection and how attorneys can help at Estate Trusts

Estate Planning Law Firms To Take Care Of Your Assets

You have two choices regarding how your assets will be distributed to you heirs in the event of your death. First, the can be distributed according to the express wishes contained in the estate plan you drew up with the help of an estate planning law firm; or second, they can be distributed according to the laws of inheritance established by your state legislature because you o never found the time to make a will. As amazing as it sounds, two out of every three Americans end up picking Door Number Two.

If you have an estate to leave to future generations and you reach your retirement years, it is only natural that your family will be curious as to who gets what. If you don't even understand yourself, it's time you started thinking about planning your estate. Get out a pen a paper to organize your thoughts and figure out all of the assets you have including property, investments, annuities, and other items like jewelry, cars and antiques. Once your thoughts are organized, call to make an appointment with an estate planning law firm. They will come up with a plan to distribute and manage your assets while reducing taxes and probate fees.

If you have a large estate to distribute, don't rely on your family lawyer or accountant to execute your final wishes and settle your affairs. When you are ready start making your final arrangements, you need to talk to an estate law planning firm. One of the things they will talk you about is the expensive and unexpected costs that will come up upon your passing. They will also help you plan so that these costs can be paid quickly, so they don't hold up the distribution of assets to your heirs. There is a lot to learn about passing on a large estate to the rightful heirs, so talking to someone with this expertise is invaluable.

Any one you owe money to at the time of your death has to be paid before any of the family can have anything. This is why it is important to have liquid assets available in order to clear up any bills that are outstanding, so that the family can start getting paid. An estate planning law firm can set this up for you.

There are many ways to make your estate look meager and non-taxable to the court in order to keep your estate intact and pass the bulk of it on to your family. The idea is to separate your estate from your assets and keep them out of the probate process. For this you will need help. An estate planning law firm can develop gifting strategies and living trusts that can be arranged to be available at a specified later date.

Finally, estate planning law firms can give you guidance in deciding on your final health care directive, or living will. A living will is designed to let your caregivers know what sort of health measures you want or do not want during your final illness, should you become incapacitated. And a power of attorney for will let you choose the person to be in charge of your health care if you are unable to express your wishes. Read more about estate planning at http://www.estatecontractstrusts.com

It's a simple reality that having a layman's understanding of inheritance laws is simply not and adequate foundation for ensuring that your final wishes regarding your estate will be honored. You need the professional advice available from estate planning law firms, with their knowledge both of the law and of financial planning.

Making sure that their final affairs are in order is the best way for most people to enjoy retirement, their family and their life. Talking to an estate planning law firm is the first step to stop worrying and start relaxing.

Find out more about protecting and preserving assets with estate trusts including tips on estate law, how attorneys can help, making a will, estate planning living trusts and inheritance tax.