Let's Talk About Living Trusts
“How many of you, by a show of hands, have your living trust in place?”
Two or three hands go up.
“How about a will?”
A few more hands go up.
“How many of you have nothing at all?”
The vast majority of the hands go up.
This is a typical exchange when we train doctors about the importance of getting their asset protection affairs in order. Why is that? Why would so many doctors, who have above-average income and assets spend more time researching the purchase of their next vehicle than getting their affairs in order through a living trust?
OK…let’s talk about it.
If you already have a living trust, good for you. If you have a will or nothing at all, you need a living trust (or need to finish the one you have from the Fortune Law Firm). Here’s why…
A will is not private. It is contestable. It is a one-way ticket to probate, which you want to avoid. (Of course, if you have a will, you will not have to go to probate when you pass, but your family will!)
Probate is public; it’s time consuming; it’s costly. Your family is dealing with courts, judges, attorneys, and fees. They are making decisions in a state of grief. Your family is mourning your loss and the last thing you want is for them to be dealing with probate. When it comes to probate, lawyers get richer and families get poorer.
A living trust, however, avoids probate and all the side effects that come from it. It is private. It provides a living will, which is a medical directive detailing your desires regarding your medical treatment in circumstances in which you are no longer able to express informed consent. It includes a power of attorney, which allows your affairs to be handled, such as keeping your practice alive while you may be temporarily incapacitated. And, of course, it provides instructions and answers to such questions as:
What happens to the kids?
How are they cared for?
What happens to my practice?
What about the house and our other assets?
Who gets what…how…when?
A doctor passed his practice to his son. That doctor, wanting to do the same for his son, had a will drawn up passing the practice (upon his death) to his son who was finishing up medical school.
The doctor passed away unexpectedly, leaving the practice, per the will, to the new young doctor. All was well, until the siblings of the deceased doctor contested the will at probate, claiming that the practice belonged to their father before it belonged to their nephew. They wanted compensation. Attorneys were hired (and paid!), legal wrangling ensued. Eventually, the case was settled…but at what cost? Money and relationships were the fees.
A living trust would have prevented this financial and family disaster.
At the Fortune Law Firm, we highly recommend that each of our clients has a functioning living trust. It provides the safety and peace of mind you and your family deserve. It answers the hard questions when you are not able to and speaks for you when no one else can.