Avoid the Time and Cost of Probate with a Living Trust
It is never too early to start planning your estate. In doing so, you will want to make sure your property goes to your loved ones in the most efficient and least costly manner.
When you die, most of your assets will be subject to probate. Probate is the court - supervised process of following the instructions in your will. It involves court filings, appointing someone to oversee the process, inventorying assets and notifying creditors. Probate can be costly and time-consuming.
One exception to probate is a living trust. A trust is a legal entity into which you can transfer your home, car, stocks, bonds, and other major assets. The “trustee” controls the property in the trust. You can name yourself trustee or some other person or entity. If you are the trustee, the “successor” trustee takes control of the trust’s assets when you die and distributes them in accordance with you instructions as stated in the trust document. This occurs without the probate court’s involvement. The use of living trust has grown because for many people, they offer significant benefits. Here are some of the main ones...
Avoid delays and expenses of probate. With a living trust, property can often be transferred after death much faster than by will, since property left by a will has to go thru the probate process. Also, the steps to be taken under a living trust can be less expensive than administering a will. So a living trust can avoid delays and the expenses of the probate process.
Flexibility. A living trust can be “revocable”, allowing you to change or cancel it before you die.
Privacy. Living trusts offer a lot more privacy than wills because wills must be proven and administered through courts, and court records are open to the public. The contents of living trust don’t have to be made public, so they are easier to keep confidential.
Control. A living trust can let you make decisions about how you will be cared for in old age. For example, you can say that trust income will be used to help your family take care of you. Without a trust, a court may have to decide who will care for you and manage your money if you cannot do so yourself.
Hard to challenge. Another important benefit is that living trusts are usually harder to challenge than wills.
Tax Savings. Depending on the value of your estate, a living trust can be a tax-saving tool, helping to lower your estate taxes.
To create a living trust, a trust document must be prepared, normally by a lawyer. Also, property that will be put in the trust must be transferred to it (this normally does not affect your property or income tax).
Whether a living trust is the best estate-planning tool depends on your financial situation, potential tax liability, and other personal matters. I can help you achieve your estate planning goals so your property goes to your loved ones in the fastest and least expensive manner.