If you’re considering whether to establish a will or a revocable living trust, you might want to consider these three advantages offered by a living trust:
1. A Living Trust Can Help You Avoid Probate. When you have a revocable living trust, any property that is titled in the name of the trust at the time of your death is distributing according to the terms of the trust – no probate necessary. On the other hand, if you don’t have a trust, or if there’s property in your name that’s been left out of your trust, probate will likely be necessary.
2. A Living Trust Can Help You Avoid “Living Probate.” What happens if you become seriously ill or suffer a severe injury? If you’re rendered unable to make financial, medical, or personal decisions for yourself, you and your family could end up in court, with a judge deciding who should be in charge of these things on your behalf. That is, unless you have an incapacity plan; and a living trust can serve as an essential cornerstone to an effective incapacity plan. In addition to determining what happens to your trust property when you pass away, a living trust can be used to spell out who should take over your trust assets in case of your incapacity, and how those assets should be managed for your benefit. Assuming you have a fully-funded trust, your family could be relieved of the need to have a court-appointed guardian or conservator put in place on your behalf.
3. A Living Trust Can Help You Keep Your Personal Affairs to Yourself. One of the drawbacks of the probate process is that it is public. With or without a will, when your property is probated, important personal information becomes part of the court records – information like the value of your assets and debts and the identities of the people who inherit your property. Court records are open to the public, so anyone with the inclination – from nosy neighbors to scam artists – can access this information. When you have a fully-funded living trust, your estate can be settled outside of court, so the terms of your trust and the details of your estate remain private.
A qualified estate planning attorney can help you decide whether a revocable living trust is right for you, and can help you put together an estate plan that’s tailored to the needs of you and your family.