Revocable Living Trust
In recent years, living trusts have grown increasingly popular as substitutes for wills in estate planning. They are sometimes called revocable trusts or inter-vivos trusts. Living trusts can have several advantages over wills, including avoiding probate, avoiding conservatorship, maintaining liquidity, and keeping privacy.
You can create a living trust with a trust document and change it any time. You can transfer all of your assets to the trust but continue to use and manage them during your lifetime. After you die, your trustee will transfer ownership of the assets to the beneficiaries named in the trust.
An important benefit of living trusts is the speed with which your property can be transferred to your heirs after your death. In addition, a living trust is private. Only you, your trustee, and your beneficiaries will know the value of the trust property, how it is to be distributed and the names of your beneficiaries.
Using a Living Trust
Most people understand the importance of a will, but many are not familiar with trusts. Both a will and a trust can be used to transfer your property when you die, but the similarity ends there. A will has no effect until you die, while a living trust becomes operative during your lifetime to manage your assets. While a will is part of the public record a trust is not, thus providing greater privacy. Trusts are usually easier to amend than will and less likely to be contested by your heirs.
You can use a living trust to make decisions about your old age care. The trust can specify your preference for care by your family or in a nursing home. If you become disabled or incompetent, your trust will control who will care for you and how your money will be managed. Without a living trust, a court might need to appoint a conservator if you become incapacitated. As with probate, conservatorship proceedings can be costly and time consuming. A living trust provides a way to avoid legal proceedings to appoint a conservator.
A living trust may also help you in a variety of other circumstances. For example, you can use a management feature of living trusts to appoint a professional trustee for the elderly, for inexperienced persons who have recently inherited wealth, and for minors. Living trusts are also useful for those lacking time to manage their property, such as entertainers, entrepreneurs, and busy professionals.
If you own real estate in more than one state a living trust can help avoid probate in each state. Probate in multiple states increases the cost and time to distribute your property to your heirs.
For more information, please contact the Asher Law Group, APC