Q: I like the idea of forming the type of inexpensive living trust that you recently wrote about so that my home and other assets could pass quickly to my children instead of going through all the time and money that probate court involves. But if I create a trust, would I be required to notify my heirs and let them know how I'd like my property to be divided after I die?
A: No, your heirs wouldn't have to be notified about the formation of the trust - or how you want your assets to be divvied - until after you pass away.
Many property owners create a trust because, unlike a will, trusts are not subject to the costly and time-consuming probate process that can devour an estate's assets with court-related fees and other expenses.
Others create an inexpensive trust solely because it provides a lot of privacy while they are still living and even after they die. A trust basically is a private document and therefore is not open to the same "public inspection" process that wills must go through in probate court, which often saves money and tends to discourage disputes among heirs or other parties against the estate.
Q.: My brother and two of my friends recently were the victims of identity theft, and it made their lives miserable. I would like to file a "fraud security alert" with the credit bureaus so that the same thing won't happen to me, but I'm planning to refinance my home soon and have heard that such alerts automatically lower a consumer's credit score and make it harder to get a mortgage. Is this true?
A.: Filing a fraud security alert won't lower your credit score or hurt your chances of getting a loan, but it could slow the processing of your application because the lender will need to take extra steps to confirm your identity.
Some banks simply make a telephone call to their customers or send them a letter to confirm that they filed the loan application themselves. Other lenders ask for more detailed information, such as a certified copy of the applicant's original birth certificate or other documents.
Because your letter states that you plan on applying for a mortgage soon, you might want to delay filing the alert until after the deal is completed to help speed the loan process.