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nikosmom · Mar 13, 2009, 06:25 PM

I have life insurance but I'm not clear on exactly what a trust is. Can someone please tell me more about setting up a trust? As the sole provider of my toddler son, I want to make sure that all my ducks are in a row should something happen to me. I don't know much of anything about wills and trusts and haven't a clue how to set one up.

George_1950 · Mar 13, 2009, 07:53 PM

This is an interesting question, and you are concerned about your son. One site I have found indicates the principal benefit to a trust is avoiding probate. I believe you want to decide between a living trust, which begins while you are living; and a testamentary trust, which is located in a will and takes affect after your death. There are some situations in which a custodial parent would not want either the other parent or the other parent's family to control the finances of the child (or children). Either a living trust or testamentary trust could be useful in that case. What are the Benefits of a Revocable Living Trust?
For a definition of living trust, see: Living Trust legal definition of Living Trust. Living Trust synonyms by the Free Online Law Dictionary.

nikosmom · Mar 14, 2009, 07:08 PM

I'm sorry, I don't understand... I checked out the links and it's just not clicking for me. Can someone make it plain for me?

I don't want the other parent to control the finances because I have a large policy on myself as well as having a large policy in place for my son. My fear would be that in the event of my death, the money would be inappropriately used and my son's policy possibly cashed out. Hope this explains more.

Let me know if I need to provide more info, thanks.

George_1950 · Mar 14, 2009, 07:36 PM

You have an estate, defined as "everything you own; all of your assets (whether real property or personal property) and liabilities." Real property is land; personal property is everything else.
You also have a large insurance policy on yourself, in which you have named a beneficiary. Your beneficiary may be your 'estate', but this is usually not recommended. You have probably named someone to be your beneficiary, and that is where the proceeds of your policy will go upon your death, outside of your estate.
The law of your state tells you where your property will go upon your death. Based upon what you have said, your estate will go to your son. But since he is not of age, someone will have to be his guardian; in most instances, the guardian will be the other parent.
Your state law allows you to make a will to direct who receives your property, and it allows you to nominate an executor to carry out your wishes. With a todler son, you will probably want to establish a testamentary trust; see more at A testamentary trust (sometimes referred to as a will trust) is a trust which arises upon the death of the testator, usually under his or her will. Testamentary trusts are distinguished from inter vivos trusts, which are created during the settlor's lifetime.Testamentary trust - Wikipedia, the free encyclopedia
You can establish such a trust, fund it with some or all of your life insurance, and name a trustee; and tell the trustee how the trust will handle its money for you son. If you are working and entitiled to social security, your son will qualify for survivors's benefits. Social Security is not bound by your will or any trust. It will most likely pay benefits for your son to your son's guardian.

JudyKayTee · Mar 15, 2009, 05:50 AM

"George" has (as always) given you very good advice but you REALLY need an Attorney for this. Let the Attorney review the circumstances and make recommendations based on what is best in your specific situation.

(Not avoiding the question but the answer should be highly personalized. What might work for me might not work for you.)

excon · Mar 15, 2009, 06:44 AM

Hello mom:

Maybe I can cut to the chase. Probate is expensive and time consuming.

If you put your assets into a TRUST, the assets in the TRUST go directly to the person you WANT to have it WITHOUT going through probate.

It's really only worth it if you have a LARGE estate.

excon

nikosmom · Mar 15, 2009, 07:50 AM

Thanks all for taking the time to answer. What specific type of lawyer should I get? I knew an attoryney would be needed, I just wasn't sure if this was something I should even be looking into or not.

What is probate?

The reason I asked this is because as I said I have a large amount of life insurance in place for myself ($1M) and I'm concerned (either my family or my son's father/his family) that it would be squandered and not used as I'd intended if I should die while my son is still a minor. I also have a large Whole Life policy set up for my son that I want to stay in place.

What is the major difference between a will and a trust?

When I see a lawyer, what type of info will I need to have handy for them to best help me?

Thanks again

excon · Mar 15, 2009, 08:01 AM

Originally Posted by nikosmom

Thanks all for taking the time to answer. What specific type of lawyer should I get?? I knew an attoryney would be needed, I just wasn't sure if this was something I should even be looking into or not.

What is probate?

The reason I asked this is because as I said I have a large amount of life insurance in place for myself ($1M) and I'm concerned

Hello again, mom:

Probate is COURT. It could, of course, cost as much as ANY court battle. If there's a question about the disposition of your assets, maybe a trust is for you...

But, I don't know. I'm going to give you LEGAL advice in terms of what a trust IS and what it DOES. I will NOT give you financial planning advice in terms of whether you NEED a trust or not.

excon

George_1950 · Mar 15, 2009, 08:28 AM

Originally Posted by nikosmom

Thanks all for taking the time to answer. What specific type of lawyer should I get?? I knew an attoryney would be needed, I just wasn't sure if this was something I should even be looking into or not....What is probate?
...When I see a lawyer, what type of info will I need to have handy for them to best help me?

Thanks again

Check this: Do I Need an Estate Plan? - Family Matters

nikosmom · Mar 15, 2009, 05:13 PM

Thanks everyone, this info has been helpful; I appreciate you taking the time to answer.

JudyKayTee · Mar 15, 2009, 06:32 PM

Originally Posted by nikosmom

Thanks everyone, this info has been helpful; I appreciate you taking the time to answer.

Now promise us you're going to live for a very long time and this whole thread has been a waste of time. Promise?

nikosmom · Mar 15, 2009, 06:43 PM

Awwww Judy I <3 you!

I hope to live for a very, very, very long time! I want to see my baby grow up, get married and have kids of his own. :)

But hey I'm an insurance agent, so I'm always thinking about "What if..." and want to make sure I'm prepared.

JudyKayTee · Mar 16, 2009, 05:24 AM

Originally Posted by nikosmom

Awwww Judy I <3 you!

I hope to live for a very, very, very long time! I want to see my baby grow up, get married and have kids of his own. :)

But hey I'm an insurance agent, so I'm always thinking about "What if..." and want to make sure I'm prepared.

Okay, just so we're in agreement. You DID say I could pick your insurance brain when my investigator brain needs help and I don't want to go to the cemetery to do so. Good to know you plan to stick around here.

And I know what you mean about working in insurance - I don't know about the thousands of people in my City who drive to work and home every day, no problems. I only know about the handful who are in terrible accidents. Needless to say I'm NOT a very good passenger when trapped in a car!