In estate planning, a lot of attorneys encourage their clients to get a living trust. A living trust is an arrangement where most of your property is owned by a trust and is controlled by a person called the trustee according to the terms of the trust. Typically you act as the trustee and the terms of the trust are that the property owned by the trust be used however you want. While you are alive the property controlled by the trust is typically used for your benefit and you control it however you want.
Why Get a Living Trust?
There are three main benefits of a living trust. These are 1) it skips probate saving you time and money; 2) it’s private; and 3) you can do some things with a trust that you cannot do with a will alone.
1. Skipping Probate
The main benefit of a living trust is that you limit the probate process. (The probate process is a court process where any of your property is passed out according to your will or the state intestate statute.) Typically to complete probate takes at least three to four months and includes court costs including filing fees, as well as any other attorney costs which adds up to at least $2,000-$3,000. However, the probate court does not control property in a trust and so any property in the trust may be transferred quickly and skip the probate process entirely saving you both time and money associated with probate.
The second reason to get a living trust is that it is private. The probate process is completed in open court and so anyone who wants can find out information about your estate. By using a living trust, you can keep the whole process private.
In the world of estate planning it is pretty common to have clients who want to impose some sort of condition on a child receiving anything. Or they want to set aside money for a child to use for college. Or with larger estates there are tax consequences to passing down larger assets with just a will that are more easily avoided with a trust. Sometimes, courts will refuse to enforce these conditions in a will; or most of the time, it is simply easier to handle these issues in a trust instead of a will.
Should I Get a Living Trust?
The answer to the question if you should get a living trust is that it depends on your situation. I had a law school professor who felt like they were frequently unnecessary and attorneys usually just pushed them on clients so that they could charge a few extra bucks. I had a supervisor at another job who had been practicing for years that felt as if wills barely did anything and would always tell his clients that because of the different reasons outlined above. I haven’t typically recommended them to clients until they have purchased their own home. At the end of the day, it’s up to you and your circumstance to determine if a living trust is a good fit for you. Then even if you get a living trust, you will still want other estate planning documents.
For questions about living trusts and other legal issues contact our office to set up a free consultation.