What happens if I don't have a Will?
If you die without a Will, then the state automatically provides one for you; it is much more complex for your survivors, and the distribution of your assets may not be as you desired.
How is distribution different if I have a Living Trust rather than a Will?
Most people have the "Will syndrome," which means that they believe that all of their assets must be distributed upon their death. Such a belief is correct for a Will, but not for a Living Trust. When you have a Will, once probate is completed, your assets must be immediately distributed outright, since there is no legal entity to hold your assets. However, with a Living Trust, the assets may remain in the Trust almost indefinitely, since the Trust is a legal entity and "lives on" after a person's death.
Why didn't my attorney tell me about the Living Trust?
The best answer to this question is to repeat the words of an attorney (previously quoted in this book): "In most states, the only justification for not having a Trust is that the attorney will not get his probate fee." Remember that 8 percent to 10 percent of the gross estate is charged each time an individual dies -- which is a lot of money! Many practicing attorneys today are not aware of the alternative to probate offered by the Living Trust.
What happens to my Living Trust if I get divorced?
Unfortunately, a Living Trust cannot, in all practicality, be cut in half. Therefore, one individual usually retains the Trust, and the other individual must revoke his or her interest in the Trust. The party who retains the Trust will retain his or her assets in the name of the Trust, and the other party will remove his or her assets from the Trust and revoke his or her interest in the Trust. Such an action is accomplished by executing a Disclaimer of Trust Interest form.
What happens to my Living Trust if I remarry?
The answer to this question depends somewhat on the age of the individuals. If you are young and still building your estate, it would be most appropriate to include your new spouse in the existing Living Trust. It would also be appropriate to identify each individual's separate property by including Separate Property Agreements in the Trust. Using this approach, your new spouse would become trustor, settlor, trustee, and beneficiary.
If you are older and have, in essence, finished building your estate, it may be more appropriate to simply retain the Trust in its existing from and not to include your new spouse in the Trust. Such occurances are quite common when an individual is in his or her seventies or eighties, is retired, and is a widow or widower. Since the original spouse has died, the B Trust is now irrevocable. Although the new spouse could be included within the Survivor's A Trust, it is much simpler just to retain the assets in the Trust, as is. In this situation, the new spouse should then have a separate Trust for his or her own assets.
When two older individuals have remarried and are living in the home previously occupied by one of them, another important aspect comes to light. It is most important that the owner of the home in which both parties are residing make an appropriate amendment to his or her Trust to ensure that the surviving spouse is allowed to remain in that home during his or her lifetime.
If my child dies before me, does his or her spouse become a beneficiary of that child's share of the estate?
The answer is almost always a resounding no. The deceased child's share of the estate passes on to the children of that child (your grandchildren), whether the children are by blood or adoption. If the deceased child has no children, then the deceased child's share of the estate would be redivided among your other remaining children.
However, you assets do not have to be distributed that way. You may leave all or part of your child's share (or whatever portion you desire) to your child's spouse. Most clients desire to pass their assets to those individuals who are related by blood or adoption but seldom by marriage.
