you should raise your clients’ awareness of these potential losses if your clients ever instruct you to place their children on their bank and brokerage assets as joint owners.
In Summary
All of this brings me back to my main tenet about whether you need a Living Trust.
Again, if you have real estate, use a Living Trust to transfer it to your beneficiaries after you die, as well as your bank and brokerage assets.
If you don’t have real estate, you can use joint ownership or ATF accounts to transfer your assets to your beneficiaries without a Living Trust. However, you must be advised that the assets you place in joint ownership with your beneficiary will be subject to your beneficiary’s problems and risks of loss.
To avoid ending up as a cautionary tale of what not to do, I still advise you to use a Living Trust for the after-death transfer of your assets to your beneficiaries.
CHAPTER 4
Establishing Your Living Trust
Or, No Better Way to Get Started.. Than to Get Started
The Living Trust, as a concept, is actually easily comprehensible. As I explained in Chapter 2, it is just like an after-death power of attorney in which you authorize a living person to sign your name to documents that transfer your assets to designated beneficiaries after your death.
Although the concept of a Living Trust sounds fairly simplistic, you have to prepare yourself for the process of establishing the actual document. Before you retain the services of an attorney to prepare it for you, you must do your homework.
Yes, I said homework– a word that may, for you, still ring with the negative connotation of sitting down at a desk and reading, writing, and researching while you would rather be doing something else that you consider more fun. At least, that’s the first thing that comes to mind when I hear that word. Even though being an adult means having to work for a living and being a slave to a mortgage, you know what compensates for that? No school tomorrow – and no homework!
But now, your Living Trust advisor is telling you to do your homework. It’s part of your Living Trust training. It’s what you need to do before you set your Living Trust in stone. And this homework involves picking the right attorney and familiarizing yourself with certain basic words and concepts that your Living Trust must contain in order for it to be a valid and effective document.
Your First Homework Assignment: Selecting Your Living Trust Attorney
There are many fine Living Trust lawyers in the area in which you live. How do you find the one that you will hire? Certainly, you can randomly select one from Internet or yellow pages listings. I encounter such left-field reasoning almost daily, such as the lady who hired me because she liked the font I used in my yellow pages ad, or the gentleman who based his decision on the fact that my last name is the same as that of his favorite pub in Ireland.
But if you want an informed opinion, ask your friends who have Living Trusts whether they would recommend their attorneys. If you have no friends, or none who have Living Trusts, then contact the trust department of the bank at which you do business and ask to speak to one of the trust officers. The trust department has officers who deal with Living Trust attorneys on a daily basis, and they will be happy to share their opinions on who they like to deal with and how they have arrived at those opinions.
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