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Where there's a will, maybe there should be a living trust, p2

After a brief foray into celebrity probate, we are going back to the discussion started in our Feb. 13 post. The topic is living trusts and how they may complement -- or even take the place of -- a will in an estate plan. Remember, this is a general discussion. There may be nuances that exist in Texas but not in another state.

When we left off, we were talking about a hypothetical situation involving Josie and two of her prized possessions: an antique car and a Robert Rauschenberg collage. She places the car in a living trust that allows her to use it during her lifetime and, on her death, gives the car to her nephew. The Rauschenberg is not in the trust, but Josie has left it to her nephew in her will.

One day, watching television with her nephew and her daughter in her living room, Josie passes away. After everything is taken care of, daughter and nephew decide to head home. Nephew grabs the keys to the antique car and drives it back to his apartment. Daughter calls the police to report that her nephew has just stolen her recently deceased mother's car.

She is mistaken. The car was in trust with her nephew as beneficiary. The second Josie died, the car was his. Because of the trust, the car is not part of the estate. Nephew does not need the court's approval to take it.

The Rauschenberg is a different matter altogether. We'll get into that in our next post.

Source: ABC Local/KTRK-TV Houston, "5 reasons you need a living trust," Jan. 21, 2014

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