Want to know more about Clayton and Clayton, PLLC and what we do? Follow us using the links below and hear the latest news about Estate Planning, Small Business Start-ups, and life in Asheville.
One of the biggest misconceptions about Revocable Living Trusts is that they are only for the wealthy. However, even if you have only accumulated a moderate amount of wealth or assets, having a trust might be a useful tool to consider for your estate plan.
Probate is the court-supervised process of settling an estate after someone dies. It is a time-consuming process and can sometimes end up being costly. Additionally, it is completely public – anyone can see the distributions made and who they are made to.
A Revocable Living Trust, however, allows for greater privacy since any assets that were titled in the name of your trust during your lifetime will generally avoid the probate process and will not become part of the public record. At the same time, a Revocable Living Trust can be altered, revoked, or amended any time during the lifetime of the person who created it – without the consent of the trustee or others – allowing privacy at death and flexibility during life.
While it is important to fund the trust by adding your assets to it, it is also important to have a will that will work in conjunction with the trust. A carefully drafted will can allow for assets that were not in the trust at the time of your death to “pour over” into the trust during the probate process.
Revocable Living Trusts are useful tools, but it’s important to keep in mind that they are not a magic solution to all of your problems. Without further planning, most Revocable Living Trusts cannot help you avoid income taxes, avoid estate taxes, shield assets from your creditors, or help you qualify for Medicaid. While options may be available such as a credit shelter trust to reduce the amount of estate taxes due for some people or a spendthrift trust to prevent a creditor from accessing some assets, these are issues that would need to be carefully addressed on a case-by-case basis.
Whether or not to create a Revocable Living Trust will vary from person to person based on their needs and estate planning goals. If you would like to talk about whether one will be beneficial to you, we recommend talking with an attorney or tax advisor. As always, don't hesitate to contact us if this is something you would like to discuss.
Titling a Car as Joint Tenants With Right of Survivorship
Your vehicle may be one of your most valuable assets, next to your home, that you own. If you rent, it may be your most valuable asset. If something happens to you, what will your partner or spouse need to do with it? Will they need the cash value of the vehicle to pay for your expenses? If so, it might require that several probate hoops be jumped through in order to sell it. In this situation, wouldn’t it be nice if you could just take the title and death certificate to the DMV? Well, owning a car as joint tenants with right of survivorship would allow just that - and is about to get easier as of January 1, 2017.
First, owning a car with your spouse/partner/family member as joint tenants with right of survivorship (JTWROS) means that, upon the passing of one of the joint tenants, ownership will be consolidated in the surviving tenant. Functionally, for estate planning purposes, this means that when one owner passes away the car is wholly owned by the survivor.
Second, this allows the car to avoid the probate process. Generally, if just you or your partner own the car separately, ownership will not pass until the probate process is completed. This can take a lot of time depending on the size and complexity of the estate.
Third, titling a car (or other vehicle) as JTWROS in NC is totally doable and about to get easier. For sometime now, the DMV has allowed people to to write in the designation “JTWROS” on the certificate of title application. As of January 1, 2017, the form will contain a “preprinted option” for co-owners to choose JTWROS.
Curious how this will impact you and your loved ones? Feel free to reach out to us to discuss it all in more detail.