January 28, 2005

A wonderful gift—the family trust

By Charles Nordmark
Special to the Times

A family trust is a responsible, thoughtful gift for you, your spouse and your family. It means security and control to your spouse in the event of your disability or death or the reverse if something should happen to your spouse.

A family trust provides a smooth transition of wealth to the next generation without the usual frustrations and high costs associated with probate. Avoiding probate, reducing taxes and keeping control is what estate planning is all about.

Most people think of estate planning as just preparing a will, yet much more is required than that. Preparing a will is usually an uncomfortable thought that leads to procrastination. Besides, a will does not accomplish all that it should; it will not protect you and your family in the event of incapacity or catastrophic illness.

Seven out of 10 of us will become incapacitated in later life. This can be a humiliating process that often places control of your affairs with the courts and attorneys. A will requires probate, a costly and lengthly court process to transfer your assets to your heirs.

The solution to these problems is to establish a family trust. It is a method of holding title to property. A trust is revocable so you and only you and your spouse can change it in any way you want at any time. You are the boss.

Upon your demise or if you become disabled, your co-trustee or successor automatically assumes control of your personal and business affairs without going to court or publishing notices of assets and liabilities or paying court and attorney fees. Most important, your assets won’t be frozen as they could be with a will.

A family trust, properly prepared, addresses all of these issues and further ensures organization of your affairs along with all of the necessary guidelines for adequate management and control of your estate.

Creating a living trust is so easy. I often wonder why, at this time when so much information is available about them, that more people don’t have them. Yet many don’t even have a will.

Living trusts have been around for over 1,000 years. They were popular in England but only in the past 30 years have the average responsible people begun to create them as a legacy for their family.

Perhaps stories or personal experience with the perils of the probate process has enlightened people about the importance of a living trust.

Here are some of the many advantages of a family trust:

- Stay in control of your estate and your affairs, not the courts.

- Keep your affairs private and handled within your family.

- Transfer your assets directly to your beneficiaries without court costs or attorney fees. (There’s a waiting period of 40 days after the death of the individual.)

- Save money—no administrative fees, no advertisingcosts or bond fees.

- Eliminate or reduce estate taxes.

- Select guardians for minor or disabled heirs.

- Define your final distribution of your assets.

- Your family and business can function as normal if you become unable to manage your affairs.

Charles Nordmark is general manager of Arthur, Nordmark, Carr & Associates, an estate planning firm of attorneys, estate planners and tax specialists. The firm specializes in multipurpose family estate plans and trusts of all kinds.
To schedule an appointment for a free consultation or trust review, call the San Jose office at (408) 988-7878 © 2004 Arthur, Nordmark, Carr & Associates, 2674 N. First St., Suite 104, San Jose, Calif. 95134.