Planning Ahead
Deborah Miller, JD, Sr. Director of Planned Giving, West Virginia University Foundation
extension of that.
Many people fool themselves
into thinking “I don’t have an
estate, and I don’t need an estate
plan.” But financial management
and control are issues that concern
us throughout our adult lives,
and estate planning is simply an
As we age, we sometimes look for ways to ease that
responsibility or to provide a back-up system of financial
control. Discussing with your attorney how you want
your financial matters handled is an important first step.
In general, the purpose of any revocable or
irrevocable trust is to put conditions on the assets owned
by the trust to control who receives how much and
when. An individual will no longer own the assets; the
trust will, but the assets in the trust will be managed to
benefit one or more persons or entities. A revocable
trust used for estate planning purposes is known as a
“living trust” because it goes into operation during a
person’s lifetime. The trust’s terms can be modified at
any time or terminated at will. Contrary to popular belief,
a living trust provides no reduction in income or estate
taxes because it is revocable. (Irrevocable trusts do yield
gift/estate tax benefits because the transfer of assets is
permanent.) A revocable trust used for estate planning
will also include after-death distribution terms, making
it a “will substitute.” Through the trust, a person can
include provisions for the same gifts to family, friends
and charitable or educational organizations that would
otherwise be included in a will. A formal will is also
needed to transfer what’s not owned by the trust.
An important consideration is who will operate
the trust by serving as trustee and successor trustee.
Some choose to serve as trustee (or co-trustee with a
spouse) of their own trust and name a family member
or a financial institution, such as a bank, as the
successor trustee when they can no longer handle the
administrative and distribution requirements. Others
allow another person or institution to handle the trustee
duties from the beginning.
Of course, there are costs to establish a revocable
trust and to transfer the title of property and assets to the
trust. The costs and complexity of such transfers range
from a new deed for real estate to special forms for
stocks, bank accounts, bonds, etc. One benefit for some
people is that a living trust document is not required to be
recorded in the courthouse like a will is.
A living trust is only one financial management
option. Others find that a durable power of attorney
paired with a will can accomplish similar goals with
less complexity (no trust is used). The person acting as
the agent is able to handle the same financial duties and
transactions as a trustee can, and the will contains the
after-death distribution provisions for the estate assets.
Either way, having a back-up system of financial
management can provide that all-important ease of mind