What is a living trust and how is it different from a last will?
A LIVING TRUST:
A Living Trust is a written legal document which your assets are placed into a trust for your benefit during your lifetime and then transferred to designated beneficiaries at your death by someone you choose, called a "successor trustee" and not someone the Court appoints. A trust actually holds title to your property so it can be immediately accessed upon your death or incapacitation. A trust is private and can be handled without any Court intervention. With a Living Trust, there's no need for "help" from the probate court or probate lawyers. Your trust will completely eliminate these unnecessary costs. Moreover, your estate can be distributed instantly at your death. There are no judges to consult or bureaucrats to please. Your trustee merely follows your instructions in distributing your estate according to your wishes.
A WILL:
A Will is a written legal document which directs where you want your assets to go upon your death but most assets cannot be obtained without first going through probate. A Will is what is admitted into probate for the Court to appoint the executor you named to gain access and distribute the property.
Do I need a living trust to avoid probate? No, not everyone needs a trust. This is something that needs to be discussed. There are other ways to avoid probate without a trust.
A living trust doesn't change your financial affairs or tax status.
A living trust lets you do whatever you want with your money - buy and sell assets, open bank accounts and make investments just like you do now.
You can amend or change the trust any time, or even revoke it and pull your assets out.
Why are living trusts so popular? You want to make sure your property goes to the right people, at the right time and at the least cost. A living trust can do all this. Living trusts helps you manage and distribute your property efficiently without court interference.
A living trust allows you to restrict how your estate is managed and spent even after your death. It can provide for the care, support and education of your children by turning over assets to them at an age chosen by you. Even insurance proceeds can be paid to the trust so your successor trustee can manage them for the benefit of your family.
A living trust can protect children from earlier marriages. Both the surviving spouse and the children from a previous marriage can receive fair treatment and protection under the terms of your living trust.
A living trust can insure that your wishes are carried out and are not subject to attack. Most living trusts contain a "no contest clause" which can prevent greedy beneficiaries and their lawyers from successfully attacking your estate plan. Trusts tend to be harder to contest than a Will.
What is “living probate?” When you mention the word "probate", most people think it is only something that happens when you die. Unfortunately, probate can also happen while you are alive. It is often referred to as a living probate but it is technically called a conservatorship and/or guardianship proceeding. If you become mentally disabled before you die, the probate court will appoint someone to take control of all your assets and personal affairs. These court appointed agents must file strict annual accounting with the court. The entire procedure is expensive, time consuming and humiliating.
Small estates are particularly vulnerable because even reasonable fees can eat up a large percentage of an estate's assets. There just is not that much to go around. Remember, every dollar that goes to pay probate cost is a dollar that could benefit your family.
When you own more real estate in other states, a probate must be done not only in the state where you lived, but also in every state where you owned real estate. Each state has probate jurisdiction of the real property located within its borders. That means that your family will have to file a new probate in each state with double or triple the costs.
Your family may pay an emotional price in probate as well. Because the process takes so long, it can be a constant reminder of the loss of a loved one. It can also increase arguments among family members who would normally seek support from one another especially if one of the family members believes they should be in charge or who gets what.
Don’t delay, you’re never too young to protect your family.