Page 54 - July2019 FOP Magazine

Trustees: Who to choose and what they do
A trustee in a living trust has similar responsi- bilities as an executor in a will. A living trust is the most effective, cost-efficient and private estate plan administered outside of probate
treat each beneficiary equally and fairly and must maintain the investments of your trust responsibly.
b
court.
In contrast, a will requires probate. Inci-
dentally, Wills for Heroes provides an excel- lent service for first responders by providing them a basic will that states the distribution of
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The trustee provides a copy of your trust to each benefi- ciary and a complete accounting of all assets and distri- butions. Importantly, other than a named beneficiary, no one is entitled to a copy of your trust, which remains
private.
• Your real estate will be prepared for sale and sold by the
TOM TUOHY
assets upon your death.
However, it is essential to understand that all wills are re-
quired to be filed in probate court when you die. Probate is a long and expensive process. Consequently, it is in your best in- terests to avoid it.
What does a trustee do?
A trustee follows your instructions in your living trust, dis- tributes your assets to your beneficiaries and handles all the responsibilities of your estate at the end of your life.
• You decide the specific gifts and distribution of your assets, by percentage or amount. You can also provide for any par- ticular circumstances, such as the age of distribution and when to sell real estate. As a result, your trustee follows these instructions.
• Your accounts will already be in the name of your trust. Therefore, when you die or become incapacitated, your trustee will immediately assume responsibility for these ac- counts and pay any necessary bills.
• Your trustee has a “fiduciary” responsibility to every benefi- ciary in your trust. Consequently, by law, your trustee must
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trustee.
If any of your beneficiaries are receiving public benefits, your trust should contain supplemental needs provisions to protect against the loss of those benefits or government reimbursement. On the other hand, any beneficiary may acquire a disability by accident or illness before your death. Therefore, every trust should contain these special needs protections to prepare your trustee to take advantage of them.
Your trustee will file a final income tax return for your es- tate.
A trustee distributes all proceeds of life insurance policies, IRAs or deferred compensation plans to the beneficiaries named with the financial institutions. It is essential to re- member that a minor (under the age of 18) should never be named as the beneficiary of deferred savings or life in- surance policies because all such proceeds are subject to probate court. Alternatively, you would list your trust, after your spouse, as the beneficiary of these accounts and pol- icies.
FOP
Benefits Plan
Who should I choose?
Who do you trust? It always depends on the person. And if you have more than one child, you know the difference.
I know that makes you smile because it’s true. Every child is different. One child might be organized, while another is a free spirit. And when it comes to the responsibility of handling your estate, you know who to choose just as well as you know who not to pick.
If you do not have children, the same principle applies. Ev- ery person is different. Therefore, appoint the most responsible person you know to be your trustee.
The right estate plan
A trustee certainly has important responsibilities, and keep- ing the peace in your family is one of them. Consequently, you should make this decision carefully. However, the task will be considerably less stressful and time-consuming than if he or she had to act as an executor in a will. Choose wisely. Then you can rest in peace.
A revocable living trust is a written, legal document that al- lows you to privately and efficiently pass your assets (real prop- erty, bank accounts, stock, saving certificates, personal prop- erty, etc.) to your family, friends or charities after your death ⁠— outside of proate court. ememer all wills are suect to probate.)
Your life insurance policies and deferred compensation ac- counts can name your living trust as beneficiary, subject to es- sential tax considerations.
Tom Tuohy is the founder of Tuohy Law Offices and the FOP Ben- efits Plan. He has been a police lawyer for 36 years. His father was a CPD detective, and his grandfather was CPD Chief of Major Investigations. You can reach Tom at 312-559-8400. Visit www. fopbenefitsplan.com or call 1-866-729-5454 for assistance with registering.
54 CHICAGO LODGE 7 ■ JULY 2019