Posted on: 2 June 2015
A will is a legal document that lets you determine how your assets are divided after you die. There are some problems with a will, including the fact that it can take some time for the will to be probated, which means that it has to be verified and validated by the judge of the probate court. This is also the time when anyone who contests the will may show up. Probate can take months or years. However, you may not be familiar with the concept of a living trust. This is a different, and potentially better, option you can use.
A trust is a legal device that is step up for the benefit of certain beneficiaries. It is administered by a trustee, who makes the decisions as to how the assets are administered for those beneficiaries, depending on how the trust is set up.
A living trust is a trust that is set up while you are living, and you and your spouse are the beneficiaries of it. You transfer all your assets into it so that you don't own anything personally; everything is owned by the trust. For example, your house wouldn't be owned by John and Jane Doe, it would be owned by John and Jane Doe, trustees of the trust. Since you and your spouse are the trustees of the trust, you don't lose any control over the assets, and you can use them as you choose. That includes buying and selling assets.
Benefits of a Living Trust
The benefit of a living trust is that when you die, the other trustee or a replacement trustee are able to step right into place and make decisions as to the assets and continue to administer them in accordance with the way the trust was set up. The replacement trustee would be someone that you appointed, so they would be familiar with the trust. You can also set it up so that the trustee is an attorney or someone at your bank.
Drawbacks of a Living Trust
All of your assets must be added into the trust. Anything that doesn't get added in is open to the probate process. Having a will to handle any assets not covered by the living trust would be a good idea.
Everyone needs to plan their estate, no matter how big that estate is. Not everyone needs to have a living trust. The best way for you to figure out what you do need is to see an estate attorney, like those at the Law Office of Tara L. Wolff, and get their advice.Share