Dear Edgar,
You and your wife are wise to be thinking about estate planning, and to be cautious about the free seminar. While the seminar may provide great general information, some unscrupulous businesses have been known in the past to do presentations designed to entice people into purchasing living trusts that may or may not be beneficial to them. Some have been known to exaggerate the benefits of a living trust and play up the fear that estates could languish in probate for years and incur many fees before the assets are distributed to heirs.
In reality, most people can avoid probate without a living trust. For example:
* If all of your assets are owned jointly with another person with rights of survivorship, those assets automatically are owned entirely by the surviving joint owner.
* If you have named beneficiaries on your assets, those assets will automatically go to the beneficiary with no need for probate.
* If you own no real estate solely in your name, and your titled personal property is valued below $75,000, your heirs can collect those titled assets (that did not automatically pass to someone) by filling out an Affidavit for Collection of Personal Property and giving it to whomever holds the asset. This is done 30 days after the owner's death, and the Affidavit must be accompanied by a Certified Death Certificate.
If someone has more than $50,000 in titled personal property and/or is the sole owner of real estate, that person has a "probate estate" which consists of the assets that did not automatically go to someone. "Probate" is the legal process where the probate estate will ultimately be distributed to others after the legal debts of the deceased are paid.
A living trust will also avoid probate because the assets in the trust will go automatically to the beneficiaries named in the trust. However, a living trust is probably not the best choice for someone who does not have a lot of property or money. As discussed above, your heirs may be able to use the affidavit procedure to collect your estate. Also, before your death you may be able to set up your assets to go automatically to your beneficiaries. If you forget assets, having a simple Will will let your heirs and the probate court know your intentions so that your assets are distributed according to your wishes.
A living trust will not protect your assets if you go into a nursing home. Your assets are still counted as available to you to use to help pay for your cost of care. In that case, you may have to revoke the trust in order to get Medical Assistance for long-term care.
Each person's situation is different, and a trust should meet the individual's needs. Beware of "boiler plate" trusts. They are generic and not individually drafted to your best interests. Do not be pressured by anyone telling you that you must sign something or pay something immediately. A time limited deal is not a deal if it will not suit your needs and may cost more to fix in the future.
Do your homework. Research the company putting on the seminar. Contact the Better Business Bureau, the Federal Trade Commission, and/or the Minnesota Attorney General's Office to see if the company is reputable. Keep in mind that this is not a fool proof method as some companies may change their name.
To determine if a living trust is right for you, I encourage you to contact a local estate planning attorney.
