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 for estate planning, many do not understand the
differences between a will and a living trust. There are many
advantages of allowing a living trust to control the disposition
of your estate, instead of a will.
The greatest benefit of a living trust is the avoidance of
probate. This document is very much like a will in that 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 go through probate and it gives you,
not the courts, control over you assets. In probate, the process
takes between 9 months and 2 years before your heirs can inherit.
With a living trust, it is dramatically quicker and only takes
weeks, generally. 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 your spouse are acting
as the trustees of your own living trust and one of you becomes
disabled or incompetent, the other trustee can easily replace
the disabled settlor as trustee without court-administered
guardianship proceedings. This can save the family a great
deal of money, and reduce the stress and anxiety associated
with guardianship. A child or trusted friend or relative can
serve if you are unmarried or if your spouse cannot serve.
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, a living trust 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 some court
that will take a great deal more time and money in the process.
A living trust might save your estate a lot of money that
would otherwise be spent on estate and income taxes. Not only
does a living trust give you the control and flexibility you
want over the management of your estate, it gives you the
peace of mind you need to feel secure over your loved ones’
future.
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