1. I HAVE A WILL. WHY WOULD I WANT A LIVING TRUST? Contrary to what you've probably heard, a will may not be the best plan for you and your family--primarily because a will does not avoid probate when you die. A will must be verified by the probate court before it can be enforced.

Also, because a will can only go into effect after you die, it provides no protection if you become physically or mentally incapacitated. So the court could easily take control of your assets before you die--a concern of millions of older Americans and their families.

2. WHAT IS PROBATE? Probate is the legal process through which the court sees that, when you die, your debts are paid and your assets are distributed according to your will. If you don't have a valid will, your assets are distributed according to state law.

3. WHAT'S SO BAD ABOUT PROBATE? It can be expensive. Legal/executor fees and other costs must be paid before your assets can be fully distributed to your heirs. If you own property in other states, your family could face multiple probates, each one according to the laws in that state. Because these costs can vary widely, be sure to get an estimate.

It takes time, usually 9 months to 2 years. During part of this time, assets are usually frozen so an accurate inventory can be taken. Nothing can be distributed or sold without court and/or executor approval. If your family needs money to live on, they must request a living allowance, which may be denied.

Your family has no privacy. Probate is a public process, so any "interested party" can see what you owned and who you owed. The process "invites" disgruntled heirs to contest your will and can expose your family to unscrupulous solicitors.

Your family has no control. The probate process determines how much it will cost, how long it will take, and what information is made public.

4. DOESN'T JOINT OWNERSHIP AVOID PROBATE? Not really - it usually just postpones it. With most jointly owned assets, when one owner dies, full ownership does transfer to the surviving owner without probate. But if that owner dies without adding a new joint owner, or if both owners die at the same time, the asset may have to be probated before it can go to the heirs.

Watch out for other problems. When you add a co-owner, you lose control. Your chances of being named in a lawsuit and of losing the asset to a creditor are increased. There could be gift and/or income tax problems. And since a will does not control most jointly owned assets, you could disinherit your family.

With some assets, especially real estate, all owners must sign to sell or refinance. So if a co-owner becomes incapacitated, you could find yourself with a new "co-owner" -- the court--even if the ill owner is your spouse.

5. WHY WOULD THE COURT GET INVOLVED AT INCAPACITY? If you can't conduct business due to mental or physical incapacity (Alzheimer's, stroke, heart attack, etc.), only a court appointee can sign for you, even if you have a will. (Remember, a will only goes into effect after you die.)

Once the court gets involved, it usually stays involved until you recover or die. The court, not your family, controls how your assets are used to care for you. This public process can be expensive, embarrassing, time consuming and difficult to end if you recover. And it does not replace probate at death, meaning that your family could have to go through the court system twice!

6. WHAT IS A LIVING TRUST? A living trust is a legal document that, just like a will, contains your instructions for what you want to happen to your assets when you die. But, unlike a will, a living trust avoids probate at death, can control all of your assets, and prevents the court from controlling your assets at incapacity.

7. HOW DOES A LIVING TRUST AVOID PROBATE AND PREVENT COURT CONTROL OF ASSETS AT INCAPACITY? When you set up a living trust, you transfer assets from your name to the name of your trust, which you control -- such as from "Bob and Sue Smith, husband and wife" to "Bob and Sue Smith, trustees of the Bob and Sue Smith Trust dated (date of trust)."

Legally you no longer own anything (don't panic: everything now belongs to your trust), so there is nothing for the courts to control when you die or become incapacitated. The concept is very simple, but this is what keeps you and your family out of the courts.

8. DO I LOSE CONTROL OF MY ASSETS IN MY LIVING TRUST? Absolutely not. You keep full control. You even file the same tax returns.

9. IS IT HARD TO TRANSFER ASSETS INTO MY LIVING TRUST? No, and your attorney, trust officer, financial adviser and insurance agent can help. You need to change titles on real estate (in- and out-of-state) and other titled assets (stocks, CDs, bank accounts, other investments, insurance, etc.). Most living trusts also include jewelry, clothes, art, furniture, and other assets that do not have titles.

Also, beneficiary designations on some assets (like insurance) should be changed to your trust so the court can't control them if a beneficiary is incapacitated or no longer living when you die. (IRA, 401(k), etc. can be exceptions.)

10. IF SOMETHING HAPPENS TO ME, WHO HAS CONTROL? If you and your spouse are co-trustees, either can act and have instant control if one becomes incapacitated or dies. If something happens to both of you, or if you are the only trustee, your handpicked successor trustee will step in.

11. WHAT DOES A SUCCESSOR TRUSTEE DO? If you become incapacitated, your successor trustee looks after your care and manages your financial affairs for as long as needed, using your assets to pay your expenses. If you recover, you automatically resume control. When you die, your successor trustee pays your debts and distributes your assets. All this is done quickly and privately, according to instructions in your trust, without court interference.

12. WHO CAN BE A SUCCESSOR TRUSTEE? Successor trustees can be individuals (adult children, other relatives, or trusted friends) and/or a corporate trustee.

13. CAN A LIVING TRUST SAVE ON ESTATE TAXES? Although this year (2010) there is no estate tax, unless Congress acts to change the law, beginning in the year 2011, the estate tax exemption will be only $1,000,000.  Therefore, if you die in 2011 or beyond, and the net value of your estate (assets less debts) is more than $1,000,000, federal estate taxes must be paid. If you are married, your living trust can include a provision that will let you and your spouse leave up to $2 million estate tax-free to your loved ones, saving tens of thousands of dollars.  In addition, other strategies may be employed to reduce or eliminate these taxes, or to provide liquidity for their payment.

14. IS A LIVING TRUST EXPENSIVE? Not when compared to all the costs of court interference at incapacity and death. How much you pay will depend on how complicated your plan is.

15. SHOULD I HAVE AN ATTORNEY DO MY TRUST? Yes, in California, only a licensed attorney can provide legal services and advice. Make sure, however, that the attorney's practice is primarily devoted to estate planning (and, if appropriate, elderlaw).

16. IF I HAVE A LIVING TRUST, DO I STILL NEED A WILL? Yes, you need a "pour-over" will that acts as a safety net if you forget to transfer an asset to your trust. When you die, the will "catches" the forgotten asset and sends it into your trust. The asset may have to go through probate first, but it can then be distributed as part of your living trust plan.

17. IS A "LIVING WILL" THE SAME AS A LIVING TRUST? No. A living trust is for financial affairs. A living will is for medical affairs. It lets others know how you feel about life support in terminal situations.

18. ARE ALL LIVING TRUSTS THE SAME? No. Unfortunately, the vast majority of Living Trusts and other estate planning documents drafted today are "one-size-fits-all" boilerplate documents, cranked out on a computer software program. As a result, many crucial provisions are often left out. For example, in the event that someone were to become incompetent and require nursing home care, under California law, we can do much to protect their assets, as well as their home. However, if that person is no longer competent to sign documents, then we must rely upon the plan they already have in place. If that plan does not adequately address long-term care asset protection issues, the individual or couple may lose thousands, even hundreds of thousands of dollars unnecessarily. Thomas L. McKenzie gives a personal guarantee to all of his clients, that each and every Living Trust, Durable Power of Attorney and other estate planning document, is PERSONALLY drafted by him in accordance with your unique circumstances.

19. HOW DO I KNOW IF MY PLAN IS DRAFTED PROPERLY? It is impossible to know whether a Living Trust based estate plan is drafted properly and comprehensively without reviewing the documents themselves. In order to assure maximum protection, this review should be conducted by an attorney who specializes in "comprehensive" estate and long-term care planning procedures. Many couples and individuals who already think they are "protected" under their current plan, may have serious deficiencies. Unless these defects are corrected BEFORE problems arise, serious consequences could follow.

20. WHO SHOULD HAVE A LIVING TRUST? Age, marital status and wealth don't really matter. If you own titled assets and want to protect your assets, protect your wishes and enable your loved ones (spouse, children or parents) to avoid court interference at your death or incapacity, consider a Living Trust.