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B2B Interview: Why You Need a Trust

Did you know that creating a trust is one of the best things you can do for your family? In this episode of Live, Laugh & Learn With Chris, I talk with Adam Sherry, partner at Spector & Sherry LLP. We’ll learn why trusts are important, how to create one, and the benefits they can bring to both you and your loved ones.

Talking About Trusts

When it comes to trusts, talking about them can be a little scary at the beginning. However, a trust is one of the best things that you can do for your family, your earnings and everything that you’ve worked so hard for. 

Adam Sherry is an attorney—and he’s also a really great guy to talk to about that scary conversation that is great to have once. I put it off for many, many years, but I’m so glad that I had it. Adam is going to guide us through the ins and outs and the whys of trusts so you know exactly what to expect.

Why a Trust Is Important

At Spector & Sherry LLP, Adam and his partner focus on the things that are most important to their clients. They focus on property, loved ones, health and children when they’re part of the picture, too. Taking a holistic approach, they prepare documents that allow you to carry out your wishes at the point that you’ve either passed away or you no longer have the ability to do so. 

Of course, those are all really scary things that are very uncomfortable for people to think about. However, these are also great reasons why people should have a trust. This is especially true because there can be a negative impact if you don’t take care of this before the inevitable happens. 

For example, California has a very interesting law that relates to transferring property from one generation to another. Post-death transfers involve probate. One of the biggest problems for the people that Adam works with is simply the cost associated with probate. 

The Cost Of Probate

I help a lot of people to find wonderful homes, which is a journey in itself. Afterward, though, this can be a different story. If you continue to hold your home in your name as an individual on your death, you’re going to incur additional, court-related costs in order to transfer it—and these are totally unnecessary. 

For instance, if you were to sell a $500,000 home, court-related costs to transfer it to your children or someone else would be $13,000. If it were a million-dollar home, it would be $23,000. That’s not necessary. Rather, it’s just something that happens if you haven’t had a conversation with somebody who can help you do a little bit of planning. 

This planning ensures that those sorts of costs are not imposed upon your loved ones. Probate is like taking that money right out of your pocket. This is money that you worked hard to pass on to somebody whom you love and want to be the beneficiary of your hard work. Additionally, it’s totally preventable. 

Isn’t a Will Enough?

The cost of working with a trust attorney to get all of this set up ahead of time is much cheaper than going through probate. Additionally, a big learning lesson for me was understanding the difference between a will and a trust. I thought that if you had a will, then it just transfers—but I was mistaken.

Adam explains that wills allow you to identify to whom you want your property and monies to go. It can cover everything from your record collection to your new electric bike or skateboard. However, the actual process of transferring it is different. When you rely only on a will, it involves courts and delays—and you incur those costs. 

The will works in that the property goes where you want it to go. However, the process of getting it from your estate to your intended beneficiaries will involve unnecessary costs associated with court process, probate, and more. So while a will works, it’s a very expensive way to get things done. The will also doesn’t stop the fact that it has to go through probate when you pass away. 

How It Works

A trust is the only way to circumvent your property from going through probate. You transfer ownership of your assets into a trust while you’re living. Then, at the point that you pass away, it’s able to go directly to beneficiaries without having to run through the court supervision process referred to as probate. 

That was another huge life-learning moment for me. It really prompted me to have that scary conversation with Adam, who came highly referred to me by a great friend of mine. I’m so glad that I met with Adam, though I was hesitant at first at having to pay a couple of thousand dollars to get everything into a trust. 

Now that I know how much it costs to go through probate, I was happy to pay just a tenth of the potential cost—which could potentially be more. He saved me a bunch of money, which I’m very grateful for.

About Incapacity

Another thing that’s really important when considering these issues is the in-between time. Incapacity means you’re alive, but you lack the ability to direct how your affairs should be carried out. Of course, Adam and his team focus on transferring assets and making it easier for your family. They’re also concerned about keeping things moving and making sure that your wishes are carried out in the in-between time.

For example, let’s say that you’ve lost capacity because of a car crash and you’re in a coma. Or maybe you have something like Alzheimer’s or dementia. We put documents in place to make sure to carry out your wishes and keep your life going in the way that you want. We work on addressing those issues as part of the process. 

This is huge for me personally, as I’ve had family experience with dementia. It’s a growing issue that’s being diagnosed earlier and earlier, which is great. This allows people to plan better and get newer, better medicines to help them live a quality life for longer. 

Securing Your Family’s Future

I hope this gives you a better understanding of what trusts are all about. As you can see, it’s not such a scary scenario when you are dealing with a professional that you can trust, that makes you feel comfortable, that you have confidence in, and that’s going to do a great job for you and your family. 

If you have any questions or need further information, please give me a call at 619-925-2322. It would be my pleasure to put you in touch with Adam Sherry of Spector & Sherry LLP. Don’t forget to subscribe to my channel so you never miss an episode of Live, Laugh & Learn With Chris. Stay tuned to see what I feature next!