These FAQs help answer questions you may have regarding TrustLock membership and the TrustLock system.
1. What do I receive for $99?
TrustLock will create a Membership Account in your name. After you complete the Estate Planning Questionnaire, TrustLock’s digital document creation feature (DocCreator) will create all of the estate planning documents you need: Revocable Living Trust, Living Will, Durable Power of Attorney for Asset Management, Real Property Deeds, Directive to Successor Trustees, Inventory of Assets, Abstract of Trust and related documents. Thereafter, these estate planning documents will be stored in your Membership Account accessible only by you or people you authorize to access your account for one year. At the end of the first year, you will be requested to pay an additional $99 to retain your Membership Account for one additional year.
2. Can I pay $99 to create my estate planning documents and not have to pay any more fees?
Yes, the TrustLock membership program allows you to create videos and store your estate planning documents and other important legal documents such as life insurance policies, etc for one year. However, if you do not want to maintain your TrustLock Membership after the first year, you can decline to pay the annual Membership fee for the second year.
3. Do I have to pay $99 each year for my TrustLock Membership?
Yes. For $99 per year, you can maintain all of your estate planning and other legal documents and personal videos in your Membership Account.
4. Is the TrustLock Living Trust Revocable? Yes.
You can make changes or completely revoke the Trust at any time. YOU ARE IN CONTROL!
5. How do I access my estate planning documents?
Trustlock will provide you with a Membership Account that can be accessed by you anywhere in the world using the internet by going to the TrustLock website and accessing your account using a username and password that you choose. Once you have accessed your Membership Account, you can print, transfer or modify your existing TrustLock documents or videos as desired.
6. How do I store my other important legal documents in my TrustLock account?
You can FAX (facsimile) all of your documents to the TrustLock fax number or scan your documents and email them to the TrustLock email address and within minutes these documents will digitally appear in your TrustLock account accessible only by you.
7. Who else will have access to the documents in my Trustlock account?
The only people who can access your Trustlock account are those people who know your username and password. Therefore, if you don’t give out this information, no one can access your account information or review your documents except you.
8. How many videos can I make using the VideoWishes feature?
Up to ten videos can be created and stored in your TrustLock Membership Account.
9. Who will transfer my assets to my Trust after TrustLock creates it?
Trustlock will provide you with Real Property Deeds to transfer your real estate to your Living Trust. Trustlock will also provide you with written instructions for your banks and financial institutions to assist you with transferring these financial institution accounts to your Trust. You will have to go to the banks or financial institutions and deliver a copy of your Living Trust as well as the Directive to complete the transfer of your accounts to your Trust. To transfer your real estate to your trust, you will have to record the Real Property Deeds with your local County Recorder or agency that manages real property deed recordation.
10. Does TrustLock provide any guarantees?
Yes, TrustLock provides a 30 day 100% money back guarantee.
There is no such thing as a foolish question – especially if the question involves planning for the future well-being of you and your loved ones. We hope these ‘’Most Often-Asked Questions’’ will give you a greater overview of Estate Planning and The Revocable Living Trust.
Q. What is meant by “estate planning”?
A. The term ‘’estate planning’’ is a relatively new terminology — and activity. It has sprung from necessity, primarily in the face of increasingly complex tax laws. In short, it concerns the problem of how to best manage, protect and preserve one’s assets during one’s lifetime and after one’s death (for the benefit of heirs). Good planning can preserve and transfer assets in minimum time and without expensive fees.
Q. What is “probate”?
A. Probate is the legal procedure wherein one’s estate (one’s lifetime of accumulated property) is ‘’settled’’ confirmed and distributed to all parties who have a legal right to share in the property at one’s death). This is handled in a county Superior Court. The court establishes clear title to all property, supervises liquidation of properties to pay the estate’s debts, pays probate fees, court costs, estate taxes, if any, and distributes the remainder to the legal heirs.
Q. What are the normal problems associated with probate?
A. There are several: 1) The estate can be tied up in court for months, or even years; 2) fees can erode the distributable net amount; 3) there is a decided lack of privacy ; 4) the management of assets (i.e.: business and investments) is outside the control of the heirs during probate.
Q. How long does probate usually take?
A. An uncomplicated probate will generally take about nine or more months. With an average sized estate, probate may take twice that amount of time. A larger, more complicated probate can run for several years.
Q. What does probate cost?
A. The hard costs of probate generally run from about 4% to 10% of the gross value of one’s estate, depending upon complexity. Statutory fees, those set by law, are based on a percent of the gross value of the estate. Other costs, generally referred to as‘’extraordinary fees,”include fees and commissions for professional services incurred when dealing with the various assets in the probate estate. Extraordinary fees may include costs for property appraisals, title searches, lease negotiations, real estate commissions, securities brokerage commissions, court filing fees, bonds, publication fees, accounting, audits, tax preparation, litigation to protect estate property, litigation respecting a contested will, professional management of an ongoing business, and various other miscellaneous legal and professional charges. These fees can swell the total probate costs far beyond expectation. In addition, there may be other immeasurable and far more devastating costs of probate, stemming from loss of business income, loss of control of investments, loss of privacy, etc.
Q. What is meant by “gross value”?
A. ‘’Gross Value’’ is the combined total fair market value of all the assets in the estate. Notice that this total does not take into consideration, nor is it adjusted for, any debt. For example, a man may die while still owning a $75,000 mortgage on a home now worth $125,000. Probate fees would be calculated on the entire $125,000 market value, but the actual equity to the estate would only be $50,000. This certainly seems unfair, and costly to the heirs.
Q. Are smaller estates probated too?
A. Yes. In California, for example, any estate containing $9,000 worth of real estate or a total of $60,000 in gross value of personal property is subject to probate.
Q. How can one avoid probate?
A. The establishment of a Revocable Living Trust is the best and most practical way to avoid probate.
Q. What is a Revocable Living Trust?
A . The Revocable Living Trust is a legal document that you can create for the purpose of protecting, preserving and managing your own estate – both during your lifetime and upon your death. In that regard, it replaces a will, and avoids the probate process altogether.
Q. How does a Revocable Living Trust work?
A . The concept is very simply, and would normally work as follows: You (as trustor) would create the trust and name yourself as trustee administrator, and also name yourself as beneficiary of all the benefits (income, use of assets, etc.) during your lifetime.
You would transfer your assets into the trust and manage them as you normally would (buy, sell, invest, trade, etc., as you determine in your sole discretion). You would name a successor trustee and successor beneficiaries that would, respectively, receive management and beneficial rights to the trust assets upon your death — exactly as you pre-detemined and directed in the trust document while you were yet alive. You can amend the document without limitation during your lifetime, as you deem necessary.
Q. Is a Revocable Living Trust practical for a small estate?
A. There are many positive reasons for creating a Revocable Living Trust, and the reasons are not all financial. Many people, for example, feel that maintaining family control of their estate — even a small estate — and providing a well-planned, uncomplicated transfer of assets to their heirs is reason enough. In other words, they don’t want their death and the settlement of their estate to cause additional concerns or troubles for their grieving loved ones. From the point of conserving assets, it’s our opinion that the distinct advantages of a Revocable Living Trust will generally prove to be beneficial and a money saver to anyone who owns real estate, operates a small business, has investments, or wants to preserve privacy. Some states, for example, will probate any estate that holds title to even a minimal amount of real estate.
Q. I understand joint tenancy property isn’t probated. Isn’t this a good way to bold title to property?
A. Not always. When two or more persons own a property as joint tenants, the surviving party or parties receive title to the deceased’s portion of ownership upon his death – without a probate proceeding. But joint tenancy ownership can present problems. For example, a joint tenant owner can’t sell or encumber his property interest without the consent of the other joint tenants. Therefore, he has no unilateral control over his property. Another danger arises when one joint tenant has creditors seeking satisfaction of debt. Creditors can get a writ of attachment against the entire property, leaving the other joint tenants totally unprotected.
Q. Can a husband and wife have one trust?
A. Yes. A husband and wife can be Co-trustees of one trust, and manage the assets together or as they have always done. Then, upon the death of one spouse, the surviving spouse becomes the sole trustee over the estate. If, however, a husband and wife together have a net worth exceeding $5,400,000 (the maximum estate tax exemption under current tax law), it may be worthwhile structuring the trust in what is called an “A-B’’ format. This is a special revocable trust arrangement that will divide the original trust estate into two trust estates upon the death of the first spouse, and enable the combined estate to be passed on to the heirs with considerable savings in estate taxes.
Q. Are estate taxes a federal tax?
A. Yes. Taxes must be paid to the federal government if an estate exceeds $5,400,000. Because of the ‘’un limited marital deduction,’’ this tax is not due upon the death of the first spouse, but only after the death of the second spouse.
You would transfer your assets into the trust and manage them as you normally would (buy, sell, invest, trade, etc., as you determine in your sole discretion). You would name a successor trustee and successor beneficiaries that would, respectively, receive management and beneficial rights to the trust assets upon your death — exactly as you pre-determined and directed in the trust document while you were yet alive. You can amend the document without limitation during your lifetime, as you deem necessary.
Q. How does the “unlimited marital deduction work?
A . This deduction allows an unlimited amount of assets to be transferred from the deceased spouse to the surviving spouse without any federal estate taxes, so long as the spouses are legally married and the surviving spouse is a U.S. citizen.
Q. What are Inheritance Taxes?
A. Inheritance taxes are death taxes imposed by the state and federal government. Some states have abolished inheritance taxes, but many still have them. Each person should familiarize himself with the requirement of his particular state.
Q. Should a single person have a Revocable Living Trust?
A. Certainly. A single person can enjoy all the benefits of a Revocable Living Trust, and may even have a stronger reason for creating one. That reason is to avoid the need for a conservatorship in the event the single person suffers from mental or physical incapacitation. With a Revocable Living Trust, the trustor can anticipate the potential problem and prepare for it with explicit directions in the trust document.
Q. How does a Revocable Living Trust avoid Conservatorship?
A. With a Revocable Living Trust, a successor trustee can be appointed to step in and run the day-to-day affairs of the trust in the event the trustor becomes mentally incapacitated or physically unable to do so. The successor trustee can conduct trust business, invest or sell assets if necessary, provide for the health and care of the trustor, and pay customary and necessary expenses from trust bank accounts, etc., without having to petition the court for a conservator to gain access to the incapacitated person’s financial accounts. Without a trust, a friend or relative would have to petition the court for a conservatorship in order to provide aid to the stricken individual from his own funds. The incapacitated individual would have no voice or choice in the matter, as the court would appoint a conservator of its own choosing and charge the legal costs and salary to the estate.
Q. Can I make special provisions for my children in a Revocable Living Trust?
A. Absolutely. Normally your children will be named as successor beneficiaries of your trust. And you can specify how the successor trustee is to provide for each one from the trust estate. Provisions can be made for care and support, college, investments, etc., and you can even specify at what age or under what conditions or all of their inheritance is to be distributed to each respective child. In short, while you’re still alive, you make the determination of how your children are provided for in the future.
Q. Can I provide for my children from a previous marriage?
A. Yes. This can be done with a separate trust ; or, if the current spouse needs continued beneficial use of the assets during his or her lifetime, an A-B trust arrangement may be used . The A-B trust would insure that your children from a previous marriage and your current spouse’s children (possibly from your spouse‘s previous marriage, also) would each receive their rightful inheritances.
Q. What is usually transferred into a Revocable Living Trust?
A. Anything and everything can be transferred into trust. Real estate and other assets (i.e.: bank accounts, je welry, valuable collections, works of art, antiques, investm ents, stocks, bonds, etc.) that represent most of the value of an estate are almost always placed in trust . In fact, there are generally few valid reasons for keeping any asset out of trust, including even those personal possessions of purely emotional value.
Q. Can a partnership interest in property be transferred into trust?
A . Yes. Any ownership interest in property, even a partial interest, can be put into trust.
Q. Does a transfer of real property cause a reappraisal and result in higher property taxes?
A. This generally is not a problem in most states. However, you should call your local county assessor’s office and confirm there will be no reappraisal of property placed in a Revocable Living Trust.
Q. Could a transfer of real property into trust cause a problem with a mortgage holder?
A. No. Mortgage holders and lenders are concerned with protecting their security, and with having their loans repaid in a timely fashion. This means, of course, that they have legitimate concerns when title is transferred without their knowledge or approval. Most institutional lenders now insist that their loan agreeme ts contain a ‘’Due on Sale’’ clause, meaning they have a legal right to demand full payment of a mortgage if a sale occurs. With a transfer to a Revocable Living Trust, however, there is technically no sale of the property -· only a transfer of title. Therefore your mortgage lender will not be concerned with the transfer of your property to your living trust.
Q. Can I transfer out-of-state or foreign real property to my trust?
A. Yes. Revocable Living Trusts are generally accepted in states and jurisdictions outside your state of residency, and this is highly desirable. Otherwise, your heirs could be faced with a separate probate proceeding in every state where property is owned, creating enormous headaches and additional expense in settling your estate.
Q. Can I transfer properties back — out of trust — if I so choose?
A. Certainly. You can deed or convey any property back into your own name if deemed necessary, or sell a property without restriction to any other person or legal entity.
Q. Are there income tax benefits for my heirs when ownership of real property is transferred through a trust?
A. Absolutely. If you transfer real estate to your heirs via a Revocable Living Trust, your heirs will benefit from having a ‘’stepped up basis’’ in the property at your death. In other words, the property value on the date of your death becomes the new basis for determining your heir’s future capital gain on the property. If the property is sold immediately at that value or less, there would be no income tax due. Future profits from appreciation above that new basis, however, would be taxed when received.
Q. Does a Revocable Living Trust file it’s own tax return?
A. No. All principal and earnings in a revocable trust is looked upon by the IRS as belonging to you. Therefore, you include all income losses on your own 1040 form.