Click Here to Learn How Morris-Hall PLLC is helping clients during the COVID-19 pandemic.

Why You Need a Living Trust

This will be the first of a four-part series on why you need a living trust.  I recently read an article from a well-known business publication that provided four reasons why you don’t need a living trust.  In this four-part series, I will identify the reasons provided by the article and examine why those reasons are severely misguided and flawed.

~ You don’t need a trust to protect assets from probate ~

The article states that you can arrange your assets using alternative methods to transfer outside of probate. Common methods include: holding jointly owned property as joint tenants with rights of survivorship, beneficiary designations, “POD” (payable on death) or “TOD” (transfer on death) accounts, and beneficiary deeds, to name a few.

These planning methods are risky and should not be offered as sound estate planning advice.  Here are a few examples to illustrate:

  • If an asset is owned jointly with a right of survivorship, and the joint tenants die simultaneously, it will need to be probated.
  • If a surviving joint tenant died without funding the asset into a living trust, or failed to find another joint tenant, it will need to be probated.
  • If the designated person on a TOD, POD, or a beneficiary designation predeceases you, and you fail to update the account, the asset will need to be probated.
  • If your designated beneficiary is a minor, or is declared mentally incapacitated at the time of distribution, the asset will need to be probated to determine a conservator and guardian for the beneficiary.
  • If you use a beneficiary deed to transfer a piece of real estate upon your death, but the deed doesn’t get recorded properly or on time, or you live in a state where beneficiary deeds are not recognized, the real estate will need to be probated.

The above examples are only a few of the things that can occur when using the first method directed by the article.  Please consult a qualified estate planning attorney to help you determine the best approach to your estate planning needs.

darren-richardsonContributed by Morris Hall, PLLC Phoenix Estate Planning Attorney, Darren L. Richardson.

About Morris Hall, PLLC:
At Morris Hall, PLLC we have focused our legal practice on estate planning for over 45 years.  Along with estate planning, our attorneys help clients and their families with matters of probate, trust administration, wills, power of attorneys, business planning, succession planning, legacy planning, charitable gifting and other important legal aspects.  We also have divisions in financial, real estate and accounting to help you incorporate all of your planning together, ensuring that everything works perfectly for your needs and situation. Our Arizona offices are located in Phoenix, Mesa, Scottsdale, Carefree, Tucson, Oro Valley, Prescott, Sedona, Flagstaff and Arrowhead.  Our New Mexico offices are located in Albuquerque, Las Cruces and Santa Fe.  Contact us today at 888.222.1328 to schedule an appointment!

This blog should be used for informational purposes only.  It does not create an attorney-client relationship with any reader and should not be construed as legal advice.  If you need legal advice, please contact an attorney in your community who can assess the specifics of your situation.

Leave a Reply