A Trust is nothing more than a legally binding contract ( called a Trust Agreement ) which creates a fiduciary, contractual relationship between three (3) parties:
· the creator of the Trust ( known variously as the Trustor, Settlor, Grantor, or Trust Maker ),
· one or more persons or legal entities ( the Trustee ) who agree to hold the property given to them by the Trustor ( the Trust Property or the Trust Estate ) in trust and administer the Trust in accordance with the terms of the Trust Agreement, until
· the Trust Property is ultimately distributed to one or more designated parties ( the Beneficiary ).
A Trust is usually signed by the Trustor and the Trustee, but not by the Beneficiary. It is then either witnessed or notarized, or both. Unlike a Will, a Trust is usually not filed, registered, or recorded, and is, therefore, not a public record. In Michigan (and in most other states), a Trust is not a separate legal entity capable of holding title to property, and, therefore, title to property must be held in the name of the Trustee. A huge advantage of a Living Trust over a Will is that a Trust can be used both before your Death, in the event of your incapacity, and after your Death as a "Will Substitute" to distribute your estate to your beneficiaries. The other major benefit of a Trust is that it avoids Probate ( and the time, expenses, attorney fees, and open records associated with Probate ) and preserves the privacy of the Trustor and the Trustor's Beneficiaries.
A Trust may be revoked or changed at any time during the Trustor's lifetime by a simple, notarized Amendment. Changes to a Will require a formal amendment ( called a Codicil ) that must be drawn up by an attorney and executed with the same formalities as the original Will. While a simple Will tends to cost less than a Trust at the outset, a Will ends up costing more, sometimes much more, to settle during the Probate court proceedings.
Are There Different Types of Trusts?
There are many, many different types of Trusts that are used for as many different purposes, such as, reduction or elimination of estate or inheritance a taxes, protection of disabled persons, protection of minors and spendthrifts, protection of assets against creditors, charitable giving, business succession planning, protection against divorce, provisions for second wives or children from a prior marriage, etc., etc. However, by far and away, the most common type of Trust today is the Revocable Living Trust .
What is a Revocable Living Trust?
It is called a Revocable Trust because during the Trustor's lifetime it can be easily revoked, amended, or changed at any time for any reason. Property can be added to the Trust or taken out of the Trust, and Trustees and Beneficiaries can be changed. But, when the Trustor dies, the Trust becomes Irrevocable , which means it can no longer be changed.
It is called a Living Trust because it is created during your lifetime versus a Testamentary Trust , which is created in a Will and which becomes effective only upon your death.
What is Trust Funding?
Trust Funding is the process of transferring property from the Trustor to the Trust. This may be accomplished in a variety of ways, such as, Deeds for real property, Transfers for brokerage and bank accounts, Beneficiary Designations for Life Insurance, Annuities, and Qualified Retirement Accounts, and Assignments and Bills of Sale for tangible personal property.
Note that a Trust only has control over property that has been placed into the Trust ( re-titled in the name of the Trustee ), therefore, Trust Funding is a very important and necessary step after the Trust has been created. Unfortunately, one of the most common mistakes people make after paying to have an estate plan drawn up is to fail to fund their new Trust. Property that remains in the individual's name at death becomes part of their probate estate and must go through the Probate process.
At the present time, there is a split of opinion among Estate Planning Attorneys whether to fully fund a Trust at the time it is created, or wait and fund it at the death or incapacity of the Trustor, and there are good arguments on both sides. For example, in the case of an elderly couple, it may be a very good idea to fully fund the Trust right away to facilitate its administration by the successor Trustees in the case of incapacity of the Trustors. On the other hand, a Revocable Living Trust does not have to be funded when it is created to be legally effective, and for younger couples, it can, and often is only funded upon the death of the Trustor by means of Transfer-on-Death conveyances, Lady Bird Deeds, Beneficiary Designations, Wills, or other means.
If I Have a Trust, Do I Need Anything Else?
A Trust is only one part of a complete Estate Planning Portfolio , which, in Michigan, generally consists of:
Living Documents : (to be used only during your lifetime in the case of your incapacity)
· Durable General Power of Attorney (for Finances)
· Durable Power of Attorney for Health Care and Patient Advocate Designation
· Advance Directive for Health Care ("Living Will")
· HIPPA Authorization and Designation of HIPPA Personal Representative
Post-Death Documents : (to be used only after your death)
· Last Will and Testament ("Will") ( just in case you have property that was not placed into the Trust )
· Designation of Funeral Representative
Hybrid Documents : (to be used both during your lifetime and after your death)
· Designation of Digital Custodian
· Revocable Living Trust
Transfer Documents : (used to convey property to your Trust, either immediately or upon death)
· Deeds (for real property)
· Assignments (for personal property)
Miscellaneous Documents :
· Revocation of Trust (for old trusts)
Do I Need A Trust?
As Dave Ramsey says, "Everyone needs a Will, but not everyone needs a Trust." I totally agree!!! The primary reasons to have a Trust are to:
· Avoid Probate ( and the time, expense, and publicity of Probate )
· Provide for and protect the surviving spouse who is aged or disabled and may no longer be able to handle their own financial matters
· Avoid Federal and State Inheritance Taxes
· Hold assets for a time instead of having them pass outright to your beneficiaries upon your death or upon the age of majority (18) ( particularly in the case of minor children or grandchildren )
· Provide for second spouses and/or children from a previous marriage
· Protect beneficiaries who cannot handle their own finances for any variety of reasons, including behavior problems, incarceration, disability, mental or physical illness, or chronic conditions
· Put conditions on a gift
· Provide for a beneficiary that is receiving, or is likely to be entitled to receive government assistance, such as, Medicaid, SSI, VA Benefits, etc.
· Protect a beneficiary who is likely to be divorced
· Transfer title to real property that is located in another state ( without having to open an ancillary probate in a foreign state )
· Transfer ownership of a family owned business after your death, etc., etc.
On the other hand, if you are sure that none of the above apply to you, and if your estate is well under one million dollars and simply consists of your home, some IRA's, some life insurance, and some savings and investment accounts, and if you simply desire to leave all your property outright to your spouse and then to your mature, adult children, then you may not need to have a trust. ( Note that there are other techniques that can be used to avoid probate, such as, using Beneficiary Designations [life insurance, annuities, qualified retirement accounts], Transfer-on-Death provisions [bank and brokerage accounts], and Lady Bird Deeds [real estate] ).
Also note that:
· In Michigan, titles to vehicles (under $60,000) and watercraft (under $100,000) can generally be easily transferred to heirs after the death of the owner without probate.
· Even though your estate is modest and Federal Estate Taxes are not an issue, it is almost ALWAYS less expensive to create a complete Estate Planning Portfolio with a qualified estate planning attorney than go through the Probate process.
· A spouse or a parent of an adult child is NOT automatically authorized to make financial or medical decisions on behalf of their spouse or child unless a Power of Attorney for Health Care, a Power of Attorney for Finances, and/or a Trust has been executed naming their spouses or parents as their legal agents and representatives. ( In this regard, remember the 1990-2005 case of Terri Schiavo in Florida, where Terri was in an irreversible coma and the husband’s wishes to remove her from Life-Sustaining Treatment were thwarted for 7 years by her parents, which led to multiple court hearings, federal government intervention, and 14 appeals, including 4 appeals to the U.S. Supreme Court .)
Posted September 1, 2017
For More Information: If you would like more information about Trusts, Estate Planning, Probate, or Elder Law, please contact attorney Robert Teeter at firstname.lastname@example.org or 231-250-6057.
Disclaimer: The information contained herein was prepared for general informational and educational purposes only, and should not be construed as legal advice. While every effort has been made to assure the accuracy and timeliness of the information, neither the author nor his law firm, Teeter Law PLC, assume any responsibility for any individual's action or inaction in reliance on this information.
End of Life Planning ("EOL Planning") is planning that is intended to ensure that your personal wishes and directions for your EOL care and treatment, including your wishes for a Hastened Natural Death ( see below ), if you so desire, are carried out, even if you can no longer communicate your wishes yourself.
It seems that when a person is diagnosed with a terminal disease, such as cancer, the most common reaction is to buy into what the doctors are selling - "We are going to fight this with everything we have - surgery, chemo, radiation, drugs, more tests, more surgery, etc.," regardless of whether the treatment is actually intended to cure you, so long as it keeps you alive for some additional period of time, and even if you have no quality of life ( really just "PROLONGED DYING" ). As an example, look at all the obituaries that say the deceased died after a "long and brave battle with cancer" ( or some other disease ). Let's call this EOL Option (1) . This does not have to be your fate. We believe it is important for you to know that there are other EOL Options available to you if you wish to take them.
EOL Planning is applicable to anyone at any age, but is especially applicable to those persons who are elderly and (a) have been diagnosed with a terminal disease, (b) have been diagnosed with progressive dementia, or (c) have reached "Old Age" and are starting to experience the symptoms of "THE FINAL PHASE OF LIFE" ( Fraility, Decline, Dependence, Dementia, and Active Dying ). As Woody Allen once famously said, "I am not afraid of dying, I just don't want to be there when it happens!" I agree with Woody on this one.
The following Other EOL Options may be controversial, and for personal, moral, or religious reasons will not be acceptable to everyone. However, many people believe that a competent adult should have the right to choose when to end their own life. There are also people, who after living a full life, would prefer to just skip The Final Phase of Life altogether before their health and/or their mind declines to the point where they are totally dependent on others for their care and they have little if any quality of life left. Regardless of the EOL Option you select, you will need the support of your spouse or family members, Patient Advocate, physician, and medical facility. It is therefore essential to discuss your wishes with all the above well in advance of the time their support may be needed.
(A) Have an Honest Conversation with Yourself and Your Family . What really matters to you at the end of your life? How important is Quality of Life to you Vs. Years of Life? Under what conditions would you prefer to end your life rather than continue to live? (For example: confined to a nursing home or memory unit? confined to bed? kept alive by artificial means? dementia? constant pain? dependent on others for daily care? unable to communicate? etc., etc.?) Talk about it, decide what you want, write it down, and communicate it to your family.
(B) Get Your Personal Affairs in Order . Have Your Estate Planning Documents Drawn Up or Reviewed and Updated. In addition to a Will and a Trust, everyone should have the following "Living Documents" - a Durable General Power of Attorney for Finances, a Durable Power of Attorney for Health Care, and an Advance Directive for Health Care ( Living Will ) with express, written instructions for your EOL care and treatment. These important documents should be prepared by a qualified Elder Law attorney expressly authorizing your Patient Advocate to refuse medical treatment, stop medical treatment and procedures if they have already been started, approve Do Not Resuscitate (DNR) and Do Not Hospitalize orders, even if such refusal, stoppage, or order will hasten your death.
(C) Have Honest Conversations with Your Doctors . This applies to you, your spouse, and to your Patient Advocate. This is not the time to be shy about asking questions of your doctors, especially if you are elderly, and especially if they are proposing serious surgery or some other invasive test or treatment. Ask whether this will "cure" me, or whether it will only prolong my death, and if so, for how long? What are the risks and the intended benefits of the surgery, treatment, or test? What is the recovery time? What quality of life will I have during and after the treatment? What quality of life issues will I lose as a result? IMPORTANT - Tell your Doctors that you have an Advanced Directive for Health Care (Living Will), and that you want the directions expressed in that document to be followed.
OTHER EOL OPTIONS
Doctor Assisted Death
(2) Travel to Europe for Euthanasia. Some countries in Western Europe, especially Switzerland and the Netherlands, have had legalized euthanasia since the 1970's. A physician there will, at your request, inject you with a lethal dose of drugs quietly and peacefully ending your life. And the Netherlands is now considering a proposal that would allow euthanasia for any older person who considers their life complete and wants to die. You don't have to be a resident and you don't have to have a terminal illness, but you do have to be mentally and physically fit enough to travel, to communicate your wishes to the doctor, and have enough money to pay for the trip and the medical services ( currently around $5,000.00 ).
(3) Move to a State that has a "Death With
. These statutes allow, under certain
conditions, physicians to prescribe ( but
) a lethal dose of drugs.
Only five states ( California,
Colorado, Oregon, Vermont, and Washington
) currently have such laws in
effect, and the conditions are very strict: 2 physicians must confirm the
patient's residency, diagnosis, prognosis, mental competence, and voluntariness
of the request. In addition, there are 2
waiting periods, the first between the 2 oral requests, the second between
receiving and filling the prescription.
Finally, the patient must administer the drugs to themselves without the
aid of a third person ( which in the US
would be a crime
Hastened Natural Death
(4) Refuse or Stop Treatment . You have the legal right to refuse any treatment and to stop or withdraw any treatment that has already begun, even if it hastens your death. You also have the legal right to direct your Patient Advocate to make this decision for you if you cannot communicate with your physician. Many people are unaware that stopping treatment can result in a peaceful death. However, stopping medical treatments may also increase discomfort or suffering, therefore, you should consult with your physician and arrange for palliative (comfort) care before stopping treatment. Under some circumstances stopping treatment can be combined with hospice and palliative care and/or voluntary stopping eating and drinking ( see below ) to shorten the dying process and reduce suffering.
(5) Use Hospice and Palliative (Comfort) Care . Hospice care is a form of palliative care that seeks to optimize the quality of life at the EOL, while neither hindering nor hastening the dying process. It is an important Medicare benefit for terminally ill patients who may only have months to live. People who receive hospice care no longer receive curative treatment for their underlying disease. Hospice is not a place, but rather a form of medical care that enables the probability of a peaceful death for most people. It is covered by Medicare, Medicaid, the Veterans Administration, and most private health insurers. To qualify for Hospice, a person usually must have only six months or less to live and will be required to decline further curative treatments. A referral from a doctor, who usually remains your primary care physician during hospice care, is required.
(6) Voluntarily Stop Eating and Drinking (VSED) . When people die naturally of diseases such as cancer, they often lose their appetites and eventually stop eating altogether. Some people hasten the dying process the same way, by VSED. If a person stops eating and drinking, death may come as early as a few days, but more commonly one to three weeks. A person who begins VSED prior to its natural occurrence should expect hunger and thirst for a few days, so it is very important to have reliable access to medication to decrease or eliminate symptoms. When done properly, VSED usually results in a peaceful, humane death, especially when combined with hospice or palliative care.
(7) Palliative Sedation . Palliative sedation, also referred to as "terminal sedation", is the practice of relieving difficult-to-manage distress for a terminally ill person in the last days and hours of life, usually by means of a sedative drug which renders the patient unconscious. Unlike adequate pain and symptom management, however, palliative sedation is not necessarily a "right." While it can be requested, it is up to the medical provider to determine if it is appropriate. Palliative sedation is usually provided in a hospital or a skilled nursing or inpatient hospice facility. All nutrition and hydration is stopped, and the patient usually dies within a few days. If the option of palliative sedation is important, discuss it with hospice or other medical providers well before it becomes necessary.
(8) Suicide . Suicide is the 10th most common cause of death for those over 65. The term, "Rational Suicide," is defined as a reasonable choice by a terminally ill or elderly person considering all the other available options, as opposed to an emotional or psychological reason ( e.g., depression, mental illness, or anger ). Although some might argue that all the Additional EOL Options listed above are various methods of suicide, this is the only one that will go in the record as "suicide." For some people, whose religious beliefs are not in conflict with suicide, and who do not wish to suffer through EOL Option (1) or The Last Phase of Life, this may be an option. But it will be up to you to choose the time and the method, find or procure the necessary materials or drugs, and carry it out without help from others ( which in the US would be a crime ). The biggest problem with suicide as an EOL Option is the timing - if you wait too long, you won't have the strength or mental capacity to do this on your own; but if you do it too soon, you may be leaving quality time on the table - tough decision!
( Posted August 1, 2017 ) Based upon information found in End of Life Washington ( EndofLifeWA.org ).
For More Information: If you would like more information about End of Life Planning, Estate Planning, Probate, or Elder Law, please contact attorney Robert Teeter at 231-250-6057 or email@example.com.
Disclaimer: The information contained herein was prepared for general educational and informational purposes only, and should not be construed as legal advice. While every effort has been made to assure the accuracy and timeliness of the information, neither the author nor the law firm of Teeter Law PLC assume any responsibility for any individual's action or inaction in reliance on this information.