As living trust attorneys, we are frequently asked by clients to describe the benefits of a revocable living trust. Many clients believe trusts are overly complicated and very expensive to establish or manage; as such, they are for wealthy people only and that the benefits of a trust do not apply to them. However, this is a misconception and here are the reasons why
What Is A Living Trust?
Before delving into the benefits of establishing a living trust, we need to first define what a living trust is. A living trust is defined essentially, as a legal document, or trust, created during an individual’s lifetime. A designated person or trustee is given responsibility for managing that individual’s assets for the benefit of the eventual beneficiary or beneficiaries. A living trust is designed to make it simpler to transfer assets with the best chances of bypassing the complicated and costly legal process of probate.
While the two share some similarities, a living trust differs from a will in that it is in effect while the settlor is alive. The trust does not have to clear the courts upon the settlor’s passing, and the beneficiaries will receive the assets left to them by the settlor when the settlor dies or becomes incapacitated.
A living trust is simply a legal way for one to pass onto their heirs the desired property without the expense, time, and hassle of having to go through probate proceedings.
What Are The Advantages Of A Living Trust?
Some of the major benefits of the living trust, as outlined in greater detail below, are that, unlike a will, the living trust avoids the probate process at death, can control all of your assets, and prevents the court from controlling your assets at incapacity.
Avoid The Time And Expense Of Probate
Avoiding probate is by far the most recognized benefit of a Revocable Living Trust. Probate is the legal process through which the court sees that, when you die, your debts are paid and your assets are distributed according to your will. If you do not have a valid will, then the assets are distributed according to state law. On the other hand, when the assets are in the name of the trust, there is no need for probate since the estate is now controlled by the trustee of the trust. You or you and your spouse can be the primary trustees receiving full control to buy, sell, borrow or transfer in the case of a spouse’s death. After both spouses pass, the trust identifies the person who will act as successor trustee. The trust gives that person the right to manage all assets on behalf of your wishes made known in the trust document. Remember, you and your spouse will decide who will manage all affairs.
Protect Your Privacy
With a Revocable Living Trust, you keep your estate plan private. Probate is a court-supervised process that requires the filing of all probate documents with the local probate court. This makes each probate pleading a part of the public court records that anyone can read, including your Last Will and Testament, a list of your beneficiaries and assets, and a breakdown of who is getting what and how and when they are getting it. In effect, the process “invites” disgruntled heirs to contest your will and can expose your family to unscrupulous solicitors. On the other hand, a Revocable Living Trust is a private contract between you as the Trustor and as the Trustee; therefore, it does not have to be filed with any court clerk. As such, you family can take care of your financial affairs privately.
Assisting During Incapacity
Another major benefit of a Revocable Living Trust is the ability to build mental disability planning right into the trust. The trust can specify how your mental incapacity should be determined, how you should be taken care of if you do become disabled, and who will be able to manage your property at that time. This will keep you and your property outside of a court-supervised guardianship or conservatorship. In the absence of a living trust, if you cannot conduct business due to mental and/or physical incapacity (Alzheimer’s, stroke, heart attack, etc.), only a court appointee can sign for you – even if you have a will (remember, a will only goes into effect after you die). Once the court gets involved, it usually stays involved until you recover or die. The court, not your family, controls how your assets are used to care for you. This public process can be expensive, embarrassing, time consuming, and difficult to end if you recover. Also, it does not replace probate at death – your family could have to go through the court system twice.
Take Care Of Your Family
A major advantage of the living trust is the speed with which your assets may be distributed. This can be an especially important issue for those who leave behind a spouse and children, especially younger children. Property from your estate is easily and quickly passed on per your instructions. This can keep cash in your spouse’s pocket to pay for living expenses for themselves and your children.
A living trust can also have other benefits. Because the estate is managed by a third party, it can be set up to hold and protect your assets until your children become adults at which time the property is passed on. This can prevent young children from wasting significant portions or even all of their inheritance before they reach maturity. It can also assist a child who is poor at managing their own finances. Additionally, a trust can reduce or eliminate estates taxes, can be changed or cancelled at any time, can protect dependents with special needs, and, most importantly, can afford you a peace of mind.
Meet with a Glendale Living Trust Attorney Today
You have spent much of your life acquiring your assets. Now is the time to protect them and to ensure they go to your desired heirs per your final instructions. Explore your options today for a living trust.
To ensure your living trust is established correctly and will avoid probate, you should consult with an experienced living trust attorney. Give the experienced Glendale living trust attorneys at Ourfalian & Ourfalian a call today at (818) 550-7777 to schedule a free, no-obligation consultation. The experienced staff at Ourfalian & Ourfalian will be happy to assist you and answer any questions you may have regarding a living trust.
Do not allow your assets to go through the time and expense of probate. Take care of your family and ensure your directions are followed to the letter by establishing a living trust today. The sooner you take action, the more peace of mind you will have about the stability and correct distribution of your estate.