No matter how large or small your estate may be, a sound estate plan is essential to ensure your assets and your family are protected when you pass. A living trust, also known as a revocable trust, should play a major part in that plan.
While it doesn’t necessarily replace the need for a will, it should be the entity which you place all of your major assets into, taking them out of your name while you’re living so they do not have to be put through probate (which your will is subject to). You then name beneficiaries to acquire your assets upon your death or mental incapacity. You also appoint a trustee who will be responsible for the execution of the trust, while a court oversees their actions.
Benefits of a Living Trust
With a living trust, your family does not have to sit through lengthy and costly court proceedings, have your assets put into public record, or deal with the possibility of a will being incorrectly interpreted or someone coming forward to contest asset distribution, leading to other family members acquiring property.
Saved Time: Probate can take months or even years before assets can be distributed. Using a living trust, distribution can happen with days or weeks.
Saved Money: While the setup process of a trust may cost more than setting up a will, as it requires more complex documentation, when it comes time to distribute the assets, a living will requires far less court time and associated legal fees. For complex estates, these fees can be more substantial than for a very simple will. If you are married, there can also be some saving potential in regard to estate or income taxes.
Saved Privacy: A living trust has the added benefit of being distributed in private, while a will that goes through probate becomes public record, along with all transactions that occur during asset distribution.
Saved Security: Because a living trust allows your appointed trustee to be in charge in the event that you become incapacitated or mentally unable to make decisions, this can provide your estate some stability and security. With a will (that does not have an assigned power of attorney), it becomes the court’s decision who will be put in charge of your property, and that person will then report to the court with all of their decisions regarding your belongings.
Protect Your Estate
A living trust may not be right for everyone, but the more complex your estate is, the more a living trust can be beneficial for you and your family when you pass or become incapable of making decisions. Consult with experienced living trust lawyers to find out if a living trust is right for you, and ensure your estate is set up in the most advantageous way for your unique situation.
