Trusts - Assets in an inter vivos trust (living
trust) will not be subject to the probate process. The probate process takes a minimum of
4 months to 12 months (4 months for will contest/12 months from date of death for claims
of creditors). There is no requirement for tax releases. Trustee's powers are not affected
by the death of the trust grantor. However, estate taxes will still be paid on assets
transferring as a result of death.
Powers of Attorney - Revoked by death of the principal. Assets are subject to the probate process unless they are titled in a non-probate fashion (e.g. joint and survivorship [husband and wife only], payable on death, trustee accounts, life insurance paid to a named beneficiary).
Trusts - Contents of trust are not subject to public disclosure. Since November 1990 estate tax returns have become confidential (prior to that date the size of an estate and the nature of the assets were public information through the Ohio estate tax return).
Powers of Attorney - Assets subject to the probate process are a matter of public record. Who really cares enough to go to the probate court to obtain a copy of your estate inventory? Assets that are not subject to the probate process are not a matter of public record.
Trusts - If fully funded assets are managed and monies expended without being subject to probate court scrutiny. If the trust is not fully funded and the grantor becomes incapacitated then the only way assets can be placed the in the trust is if the grantor has given someone a power of attorney to transfer assets into the trust.
Powers of Attorney - Under a durable power of attorney the disability or incapacity of the principal does not affect the authority of the attorney in fact. The attorney in fact may continue to act on behalf of the incapacitated principal. No reporting to the probate court. If a guardianship is instituted, the guardian may revoke the power of attorney.
Trust - Assets must be transferred into the trust which may be a nuisance. Assets not transferred into trust should be subject to a durable special power of attorney to fund the trust. Income tax issues unless truly a grantor trust. However, joint and survivor accounts and payable on death accounts generally will not become trust assets.
Powers of Attorney - Attorney in fact simply acts on behalf of the principal. Both a trust and power of attorney should be prepared by an attorney at law.
Trusts - Assets in a revocable trust are subject to estate taxes. An irrevocable living trust may remove assets from your taxable estate (however, the sacrifice is control of the assets and inability to alter terms of the trust).
Powers of Attorney - Assets are subject to estate taxes because the assets belong to you at the time of your death.
Trusts - Can effectively distribute the assets in the trust just like a Will. The Will should have a pour-over clause passing any probate assets into the trust for administration.
Powers of Attorney - Assets will pass according to the terms of your Last Will and Testament unless they are nonprobate assets (e.g. joint and survivor accounts, payable on death accounts, or life insurance payable to a named beneficiary).
Trusts - Second marriages, prenuptial agreements, children who are not capable of managing money, estate distribution other than immediate to beneficiaries (controlling your money after your death as long as possible), need for professional (bank) management of assets in the event of incapacity or death, no one else sufficiently close and capable of managing your assets, excess of $600,000 in assets (definitely in excess of $1.2 million dollars) for marital deduction/unified credit shelter planning, and just because you feel comfortable with all of the technical aspects. Taking title to real estate located in other states to reduce probate complications. Complicated Medicaid planning transactions.
Powers of Attorney - All single persons should consider having a power of attorney (regardless of age), and all senior citizens should consider granting a power of attorney to a trusted relative. Danger with both a trust with an individual as trustee and power of attorney is that the holder will abuse the power, mismanage your assets, or leave town with your assets.