Wills and Trusts

A will is a written document in which the maker, called the testator, sets forth the manner in which his or her property shall be disposed of after his or her death. The legal proceeding authorizing distribution of a decedent's estate is called probate. Anyone can benefit substantially by having an estate plan incorporating the use of a Revocable Living Trust. With a well thought out estate planning and probate plan, you will save thousands of dollars.

A "Formal Will" is a typewritten document prepared in accordance with the law. A valid formal will must be signed: (1) by the testator; (2) in the testator's name by some other person in the testator's presence and by his or her direction; or (3) by a conservator pursuant to a court order to make a will. There are several different methods used to create a "last will and testament":

Formal Will

Holographic Will (Least legally binding)

Statutory Will

Pour-over Will (Includes all assets that were left out)

All wills contain certain clauses. Order and usage of these clauses vary, depending on the needs of the testator. Generally speaking wills should not be used for estates over $60,000.

Codicils

A will should never be changed or amended by writing on the original. This may make the will invalid. Instead, a "Codicil", which is a supplement to a will, would be prepared. A codicil may modify, add to, or revoke provisions of the original will. There is no limit as to the number of codicils that may be made to a will, but after a number of codicils have been made, it is a good idea to prepare a new will in order to avoid confusion and misrepresentation. Also, if many changes to a will are desired, it is better to prepare a new will instead of a codicil.

Living (inter-vivos) Trusts

A trust is an arrangement under which one person, called a trustee, holds legal title to property for another person, called a beneficiary. You can be the trustee of your own living trust, keeping full control over all property held in trust.

A "living trust" (also called an "inter vivos" trust by lawyers who can't give up Latin) is simply a trust you create while you're alive, rather than one that is created at your death under the terms of your will. This revocable living trust is always subject to change or cancel (revoke) while you're alive. Living trusts are not just for the wealthy. Many think their assets are too modest, or that they have plenty of time to plan for the distribution of their assets after their deaths. But even those with limited means and who are in their money-earning years can do themselves and their families a great favor by having a simple estate plan, not only because a revocable trust addresses their wishes as to asset distribution, but because a valid living trust will provide for the creators needs in the event of their prolonged illness.

Different kinds of living trusts can help you avoid probate, reduce estate taxes, or set up long-term property management. By far the best way to avoid probate, living trusts are usually not contested and are best utilized with estates valued over $60,000.

Property you transfer into a living trust before your death doesn't go through probate. The successor trustee -- the person you appoint to handle the trust after your death -- simply transfers ownership to the beneficiaries you named in the trust. In many cases, the whole process takes only a few weeks, and there are no lawyer or court fees to pay. When all of the property has been transferred to the beneficiaries, the living trust ceases to exist. Lawyers commonly charge upwards of $1,000 to draw up a simple trust.

Assuming you decide to prepare a revocable living trust, how much should you expect to pay? If you hire a lawyer to do the job for you, get ready to pay between $1,000 and $1,500. Non-lawyer living trust companies (commonly referred to as trust mills by attorneys who hate their competition) typically come in a few hundred dollars cheaper than attorneys.

Here at Chavez and Associates we will prepare your living trust with a backup will for a modest fee ranging from $500. When you need help with estate planning and probate issues, call us at toll-free at (800) 458-2771 or (626) 448-1134 to schedule a no-hassle, no-obligation appointment. We accept all major credit cards and offer convenient payment plans.