We recently had the privilege of serving Robert & Kathy Coleman (not their real names), in preparing an estate plan. The Colemans have been married for over twenty years and have one child, a son, who we will call Randy. The Colemans’ goals were to:

• Remain in control of their assets
• Protect each other in case either or both of them are incapacitated
• Avoid the delay and cost associated with probate
• Keep their financial affairs private
• Leave a legacy for Randy and protect him and his inheritance from the risks of life none of us can control

Their property is entirely community property (accumulated during their marriage) and consists of:

Asset Description	Value/Equity
Primary residence	$ 205,000
Rental property	150,000
Cash (bank accounts)	70,000
Retirement Accounts	2,000,000
TOTAL NET WORTH	$ 2,425,000

After reviewing their needs and goals with our attorney, the Colemans opted for a Revocable Living Trust plan. We designed the trust to hold all of the assets that can be held in a trust (everything but their retirement accounts). The trust agreement meets all of their stated goals for themselves and their son during their lifetimes, and takes the place of an ordinary will after their death. We also coordinated the transfer of assets into their trust with the beneficiary designations for IRAs and life insurance.

Included in their trust agreement was a unique Personal Protection Trust (PPT) for their son, Randy. His PPT will ensure that only Randy can benefit from this legacy from his parents. No one else can break the asset protection provisions of his PPT, so that Noah’s inheritance is protected against divorce, business failures, accidents, litigation, and disability, just to name a few potential predators. The unique design of this PPT will also save Randy thousands of dollars in income taxes, in that all income to his PPT will be taxed at Randy’s personal income tax rates, not at (much higher) trust tax rates. Randy will eventually be of age to serve as his own trustee.

COST COMPARISON TO TRADITIONAL WILL-BASED PLAN

Description	Will Plan	Trust Plan
Cost of estate planning advice and document preparation	$ 2,900.00	$ 6,500.00
Cost to probate Robert and Kathy’s Wills	15,000.00	–
One guardianship	25,000.00	–
Future maintenance costs to keep plan current with changing circumstances	3,000.00	3,000.00
TOTAL POTENTIAL COST OF PLAN	$ 45,900.	$ 9,500.

The Colemans invested a total of $6,500 in their revocable trust plan, a potential savings of $36,400. Minimum estimated savings is $11,400.

The Colemans were thrilled to know that their plans for the future will be carried out according to THEIR RULES, not the state’s rules, without the delay, expense, and uncertainty of the probate system. An investment of less than half of the cost, to create a state-of-the-art plan that will work because the Colemans set the rules, codified in their trust agreement.