Since the estate tax exemption was raised a few years ago to over $5 million per person and indexed for inflation, many people think that revocable living trusts aren’t as important as an estate planning tool as they once were. It’s true, far fewer people need trusts for estate tax purposes, but so many other reasons exist why a revocable trust can still be extremely valuable.
Case in-point: over a year ago, I was introduced to a lady, let’s call her Betty. She wanted to know if a trust was right for her. The total value of her estate was right at $1 million. She has one child with whom she is estranged, so she is leaving all of her assets to charity. Betty doesn’t really care if her estate goes through Probate when she dies. So a trust really isn’t of any value to her, right? WRONG!
Luckily, last year Betty decided to have her attorney draft her a complete estate plan that included, among other documents, a revocable trust and a durable power of attorney. I received a copy because she had named Central Trust Company to serve as her successor Trustee and as her agent under the Durable Power of Attorney. Keep in mind, we were named to serve in the event that she “resigned, became incapacitated or died.”
I got a call about two weeks ago and unfortunately, Betty had suffered a severe stroke and was found by one of her neighbors unconscious on the floor. Betty is now in a long-term care facility and it’s unknown if she’ll ever return home. Question: who takes care of Betty’s house, cars, investments, payment of bills, pets, etc? Central Trust does! Since being notified, we have collected Betty’s mail and all of her bills will come directly to us for payment. We’ve removed all of the food from her house, secured the house, arranged for lawn care, will arrange for her hay fields to be harvested and made arrangements for her pets. We’ve also notified all of the places where she had accounts and our team of portfolio managers will soon be handling management of Betty’s investments. Central Trust will also make sure all insurance is current and that tax returns are filed as required. And this is just the start. We are here to take care of whatever may be necessary for Betty.
I don’t know if Betty even understood a year ago how important it was for her to have a comprehensive estate plan in place. My hope is that she will make a full recovery, return home and assume responsibility over everything again. But if that doesn’t happen, Central Trust is ready to act on Betty’s behalf for whatever the next step may be.
Do you have a comprehensive plan in place? Remember, it’s not just about taxes anymore!