A living trust is a legal document which allows you to place your assets into a trust for your benefit during your lifetime, and then transfer them to designated beneficiaries at your death by the “Successor Trustee” you select.
Living Trusts have become popular because they offer the following advantages over a Will-based estate plan:
- A Living Trust protects your privacy by keeping your final wishes a private family matter, since only your beneficiaries and Trustees are entitled to read the trust agreement after your death. On the other hand, a Last Will and Testament that is filed with the probate court becomes a public court record which is available for the whole world to read.
- A Living Trust provides instructions for your care and the management of your property if you become mentally incapacitated. Since a Last Will and Testament only goes into effect after you die, it cannot be used for incapacity planning.
- If you fund all of the appropriate assets into a Living Trust prior to your death, then those assets will avoid probate. On the other hand, property that passes under the terms of a Last Will and Testament usually has to be probated. A probate could add thousands of dollars of costs at your death.
Although Living Trusts offer privacy protection, incapacity planning, and probate avoidance, they are not for everyone. If you have questions about Living Trusts, please contact my office.