Frequently Asked Questions

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TRUSTS

Can I use a kit to make my own Living Trust?
Can a Living Trust protect my assets from creditors?
Who enforces my Living Trust when I pass away?
Do you have to be a citizen to have a Living Trust?
I have a condo in Mexico. Can I put that in my Living Trust?
What if I move? Or own property in another state?
Where do I file my Living Trust?
I heard if I don’t own real property, there is no Probate. Is that true?
I don’t have any family member who would be a good Trustee. Can I still do a Living Trust?

INCORPORATION

Can one business owner become a whole corporation?

TRUSTS

Can I use a kit to make my own Living Trust?

It’s not a good idea. While there are some kits on the market that may help you create a Living Trust for a temptingly low price, the truth is, you will likely get what you pay for. A do-it-yourself kit may create documents that are ambiguous and require interpretation and/or additional direction from the Probate Court, which is exactly what the Living Trust is designed to avoid!

Can a Living Trust protect my assets from creditors?

No. A Revocable Living Trust is designed to separate your assets from you just enough that they are not subject to Probate. Because you retain control of your assets, they are still subject to any form of collection.

Who enforces my Living Trust when I pass away?

When you create your Living Trust, you should inform the person you are choosing as your Successor Trustee that you have the Living Trust, and make sure he or she is willing to step in and take care of business for you and your beneficiaries. Your beneficiaries are entitled to see the Trust as it pertains to them after your death, and can enforce the terms.

Do you have to be a citizen to have a Living Trust?

No. If you own property in the United States, you can have a Living Trust. If you are not a citizen, there may be special language required or you may need to have a trustee that is a citizen work with you to handle certain tax issues.

I have a condo in Mexico. Can I put that in my Living Trust?

No. Your Living Trust is created according to United States Law, and is generally not recognized internationally. To protect assets held outside the United States, you will need to consult with an attorney in that country.

What if I move? Or own property in another state?

Your Living Trust will be honored according to the laws of the state that it is written in, regardless of where you live, or where your property is located. If you have out of state property, though, it is very likely that you will need to have assistance by someone qualified to prepare real estate documents in that state, because every state has different laws as to how property transfers may take place.

Where do I file my Living Trust?

You do not file your Living Trust. It is a private document. You should, however, keep it in a safe place, such as a fireproof safe.

I heard if I don’t own real property, there is no Probate. Is that true?

It’s not really true. If you don’t own real property, such as a house, and your estate value is low enough (currently under $100,000.00), your assets might pass with a “lighter” version of the Probate Court, called Summary Probate. While it is not quite as difficult as normal Probate, it still makes your assets public record, families still argue, assets may be frozen so final bills and expenses can’t get paid, and will incur fees.

I don’t have any family member who would be a good Trustee. Can I still do a Living Trust?

Absolutely. Many banks or investment companies have a Trust Department that will provide excellent administration of your Living Trust, for a fee. Because the fee is based on the value of your estate, it’s in their best interest to manage your estate well. A corporate Trustee may also be a good choice if you think your beneficiaries might argue with your Trustee, because there is complete impartiality. Aside from the cost, the only disadvantage is that if your beneficiaries need additional distributions for school or medical expenses, there is sometimes additional red tape. You should check with the bank and make sure they have a Trust Department and see if they have any special language that will need to be added before your Living Trust is completed.

INCORPORATION

Can one business owner become a whole corporation?

Absolutely! The corporation will require officers to manage the corporation and stockholders to own the corporation, but you can be all of the officers and the sole stockholder. If you run the business by yourself now, there’s no reason that incorporating should change that unless you decide to do so!