The Better Option – The Living Trust
Although it is very difficult for some to think about preparing for their own death, it is important to make the decisions that will best support your loved ones quickly and in the most cost-effective manner. While most people know of the importance of estate planning, many do not understand the differences between a will and a living trust. There are many advantages to using a living trust to control your estate, instead of a will.
For a brief description of a will and a living trust, click here. The greatest benefit of a living trust is the avoidance of probate. This document is very much like a will in which you instruct how your final affairs are handled and who you want to receive your assets after you die. But unlike a will, a living trust does not drag your loved ones through the probate process. It gives you, not the courts, control over your assets. In probate, the process takes between nine months and two years before your loved receive your assets. With a living trust, the distribution process can be dramatically more timely and efficiently. If you own property in other states, a living trust is especially advantageous, because you will avoid multiple probates.
In addition to being very lengthy, probate can be quite costly. Probate administration is often estimated to cost between 3% and 10% of the estate’s value. By creating a living trust and opting out of the probate system, you can avoid expensive court costs and legal fees. Living trusts are easy to set up, maintain, and can be changed or canceled at any time. Also, they are more difficult than a will to contest, because it requires such a person to file a civil lawsuit.
In the case of becoming physically or mentally incapacitated, a living trust prevents court control of your assets. In probate, a person must be appointed by the court to oversee your care, keep detailed records and report to the court for approval of all expenses. In contrast, if you and/or your spouse are serving as the trustees of a living trust in your name, and one of you suffers an injury or illness that prevents you from continuing to serve in that role, the other trustee between the two of you can replace the disabled trustee without the need to enter guardianship proceedings adminstered by a court. And if you are unmarried or if your spouse cannot serve as a trustee, an adult child or trusted friend can also take on the role. By avoiding court, you and your family can save money, time and stress. With a living trust, you select a successor trustee to manage your financial affairs according to the instructions that you provide in the trust.
There are many other benefits of having a living trust over a will. Unlike a will, which is a matter of public record, living trusts allow your family to take care of your financial affairs privately. This can allow your family to be protected against disgruntled heirs and unscrupulous solicitors. Not only does it allow for quicker distribution of your assets to your beneficiaries, but a living trust also prevents the court from controlling assets when minor children inherit and can also prevent unintentional disinheriting. If your situation involves business management, a living trust can provide a smooth transition of ownership from you to the successor trustee of your choice.
A living trust can give you maximum control while you are living and after you die. It allows you to dispense of your property quickly, cost-effectively and in the manner that you choose. It is a powerful instrument that gives you control over who will administer your estate, instead of the state, which often takes a great deal more time and money in the process. A living trust might save your estate a great deal of money that could potentially be wasted on the estate and income taxes. Not only does a living trust give you the control and flexibility you want over the management of your estate, but it also gives you the peace of mind that your assets will make it into the hands of your loved ones.
Contact The Law Office of Theresa L. McConville
If you are trying to plan your future, then talking to an attorney is in your best interests. You can contact The Law Office of Theresa L. McConville‘s Camarillo office by calling us at 805-910-7905 or by sending us an email. If you decide not to proceed after consulting with us about estate planning services, you will not be charged for the initial consultation. If you do elect to proceed, we handle estate planning matters on a reasonable flat-fee basis.