Do I Need a Living Trust?

Statistics indicate that only about one in three adult Americans have some kind of estate documents in place, such as a will or a living trust. While many Americans are familiar with the concept of a will, far fewer understand or have even heard of a living trust. Many experts believe that perhaps the best gift you can give to your heirs is a signed will and a living trust.

What is a living trust?

It is a legal document that allows you to place your assets (investments, bank accounts, property, automobiles, valuable possessions, etc.) into a trust that you can manage as long as you are able. You would also name a “trustee” or “successor trustee” who would manage your assets should you become incapacitated or upon death. A revocable living trust allows you to move assets in and out of the trust as often as you want, while an irrevocable trust is permanent.

How is a will different from a living trust?

A will expresses a person’s wishes, from naming a guardian for your minor children to designating where your possessions and cash assets will go. You can name an executor to ensure your wishes are accurately carried out. However, a will only becomes active upon your death.

What are the advantages of a living trust?

  • Avoiding Probate. After a loved one’s passing, a will must go to probate, which is a thorough and often lengthy legal process designed to evaluate your estate, pay any debts and taxes and transfer assets to your heirs. The costs of going to probate are not inexpensive, often totaling between 5 and 10 percent of the value of the estate’s assets. Many living trusts avoid probate’s costs altogether, saving money and speeding up the time of the distribution of your assets.
  • Retaining Privacy. Probate is a public process and could open the door for distant family members or friends to challenge the will in court. By avoiding the probate process, a living trust keeps the deceased’s affairs private. Also, a trust is generally more difficult to challenge in court.

How would I set up a living trust?

While some have found living trust software products to be adequate for their needs and less expensive than an attorney, you often get what you pay for. You should consider hiring an experienced estate planning attorney who can guide you through the process of drafting a will (if you don’t have one) and a living trust that best fits your needs.There are many options to consider, as an attorney, such as the best living trust lawyer in Folsom, CA, at a firm like the Yee Law Group, PC, can explain.