Living trusts have become more popular as estate planning instruments, but are they always the best option?

What is a Trust?

 A trust is one way to attach instructions to a set of assets. For example, you might put funds in trust for your granddaughter with rules for when it pays out: Maybe she has to graduate from a 4-year college and reach age 25 before the trust pays out. Or maybe she gets 1/3 of the funds at 25 and the rest at age 30. The rules are really up to the person who creates the trust and contributes the funds. They can be as simple or as complicated as you like. A revocable living trust is unique because you can still freely access the funds you’ve put in trust for as long as you live.

Trusts in Estate Planning

Because trusts can be used to set aside money with instructions for use, they can be tools for giving away assets after you die. This is especially the case in states where using a will to distribute your assets is more costly. For example, in California, a $500,000 state distributed could cost around $26,000 to distribute with a will. A million-dollar estate would be closer to $46,000. These fees come from a mandatory court process that a will must undergo, called probate.

By contrast, assets distributed using a trust do not need to go through the same probate process, often saving the family time and money. This is one of the reasons trusts have become so popular in states with costly probate procedures.

Living Trusts in Texas

In Texas, probate is often much quicker and more cost-effective than in states like California. In large part, this is because Texas allows for what’s called “independent administration,” which is essentially means that the distribution of assets can happen without the supervision of the court. There must be an initial hearing to show the will is valid, but after that the family can handle the administration without ever going back to court — so long as the will has been drafted correctly and other requirements are met.

So, if probate is easy and cheap in Texas, do we really need living trusts here?

The short answer is no. Trusts are usually more expensive up-front and require a bit more maintenance and attention throughout your life. For many people, it just doesn’t make sense to use a trust when a will can get the job done just fine.

However, that’s not to say that a trust is never the right option. Here are some reasons to consider a trust — beyond just avoiding probate.

Why Choose a Trust?

• For Privacy. As part of the probate process, a will gets filed in the public record. However, a trust document doesn’t need to be made public in the same way.
  
• For a Quick Transition. Even if probate costs are lower in Texas, it still does take some time to probate and then administer a will. A trust instrument is effective immediately on death, meaning beneficiaries don’t have to wait to access funds — unless of course the trust document itself requires it.
  
• For Business Continuity. Ownership interests in a business are also part of your estate. If the slow march of probate might inhibit important business decisions, you’ll want to find a way to pass along those interests faster. A trust is one way; a buy-sell agreement is another.
  
• For Control. If you don’t want to give assets to someone outright, but instead want to make the funds conditional or earmarked for certain things — like education or housing — a living trust might be one option. However, you can also create a trust in your will, called a “testamentary trust,” to accomplish the same purpose and potentially at less expense.
  
• To Deal with Out-of-State Property. Texas wills can govern the disposition of all your property anywhere in the world — except dirt. So an Illinois-based bank account can get distributed with a will, but not an Illinois condo. Your family (or whoever you appointed as executor) will have to go through the probate process in every state where you own real estate. By putting all your real estate in a trust, you can avoid that inconvenience and expense.

A power of attorney (a “POA”) is a legally binding document granting another individual power to act in your place. The signer of a POA can dictate the scope of the power: it can be for a particular transaction (such as signing for the purchase of a house), a particular category of transactions, or for any and all transactions.

Choosing an attorney can be a difficult proposition. There are so many of them out there, and it’s not always clear what the differences are between firms. On top of that, license requirements put limits on how lawyers can advertise, which makes tracking down your options more difficult.

But have no fear! Your best bet is to leverage your personal network, do your homework, and know what you’re looking for. Here’s some advice on how to go about finding the right lawyer for you.

Constitutional Law 101

The U.S. Constitution is there to protect our rights and freedoms, but so often we as Americans disagree on what it means. Part of the challenge is that the Constitution states our rights so briefly and succinctly, there’s plenty of room for interpretation and argument.

For example, the First Amendment says “no law shall abridge the freedom of speech.” But what’s free speech?

Can I accuse someone of murder when I know it’s a lie? Can I record myself reading a Harry Potter book and sell it to whoever I want? Almost everyone will universally agree that that isn’t okay, or even permitted under the law. So what gives?

Make Your Own Digital Business Card

If you’re anything like me, you’ve got hundreds of beautifully designed business cards that are uselessly sitting on your desk when you need them the most. It’s an extra thing to think about, and it can be hard to remember when you’re running out the door during a busy day.

I decided to solve that problem by building myself a personalized digital business card.

It works automatically on about four out of five devices that I come across, and it’s a nifty party trick! To get started, you’ll need a few things.

• An NFC enabled smartphone. NFC is standard on most, if not all, new models of smartphones.
• A smartphone app for writing to NFC tags. I used NFC tools, but there are others out there.
• One of your business cards.
• An NFC sticker. You can buy packs of NFC stickers on Amazon for around $10.
• A webpage for hosting your contact info.
• (Optional) Access to lamination services, such as Office Depot.

Step 1: Design Your Contact Info Page

Your contact info page can look however you want it to. However, I would suggest keeping the page simple and informative. Here’s mine:

It’s a simple image that I embedded with a link to my “Contact Card.” You’re probably familiar with contact cards, but just in case you’re not – a contact card is a file format for storing contact information on a phone. The contact information stored on a contact card include names, email addresses, phone numbers, websites, social media profiles, and more.

Create a contact for your own business on your phone, and add every piece of info you want people to have. I include all contact info, a link to my website, a link to my firm’s social media profiles, and the name of my firm. “Share” your contact card to get the file in the correct format, then upload it to a location that is publicly accessible (such as your website).

Now you’ll put the image and the link together: create a page on your website to place the image, then embed the link to your contact card in the image. Here’s a link to my contact card page.

Step 2: Make Your NFC Tag

Open up your NFC-writing app, and find the “Write” option. Your app will probably give you various options on the data you can write to your tag. Options will likely include files, phone numbers, addresses, and various automated tasks, such as automatically logging someone into your WiFi. All you’ll need to add is a URL pointing to the page you set up in Step 1.

You technically could just add all of that information from Step 1 directly to the tag instead of the webpage, but there are a couple of reasons not to do that. First, NFC tags can’t hold very much information, and you might limit what info you can share with your tag. More importantly though, it makes it inconvenient to update the information you share if it ever changes.

Once you’ve selected the URL, select the “Write to Phone” option and tap the upper back of your phone to the tag. You should get a notification on your screen letting you know if the tag was successfully written. If something goes wrong, you can just tap “Write to Phone” and try again – NFC tags let you write to them as many times as you want.

Test the NFC tag by closing the app on your phone and tapping the back of your phone to the tag again. Your phone should prompt you with a link to open.

Step 3: Wrapping Up

The final step is the most satisfying – attach the sticker to the back of your business card, and take it to get laminated. Make sure not to fold the sticker around the edge of the card or the NFC tag will break. In fact, I would bring a few cards with a few stickers affixed to them just in case something goes wrong.

If you don’t want to or can’t get the cards laminated, consider sticking the NFC tag to something you always have with you, like a water bottle or cell phone, and cover it with a sticker. It will function just as well, and it will be just as convenient.

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