It’s understandable why so many people avoid thinking about their own death, much less planning for it. According to Caring.com, less than half of U.S. adults have a will or living trust established. While the most common reason cited was “not getting around to it,” it’s somewhat safe to assume that an underlying aversion is the primary cause.
Estate planning can be uncomfortable, but it can also be rewarding – both emotionally and financially – for you and for your loved ones. A living trust, also called a revocable trust, establishes a plan for your assets to be properly transferred or managed after your death based on the instructions you outline while you’re alive. When properly established, this legal document provides several benefits beyond those of a written will, most notably:
A will does not avoid probate. When someone dies with only a will, the distribution of their assets and payment of their debts are determined by court proceedings that can put the surviving family members through undue stress. Those with no will or trust go through the same court process.
A living trust, meanwhile, is not subject to probate because the assets are controlled by the trust entity rather than the deceased individual. The successor trustee takes over the trust for the grantor, settling the trust as directed in the documentation. Bypassing probate with a living trust saves your beneficiaries a great deal of time, money, energy, and grief. It also keeps your family matters private, whereas a will submitted to court becomes public record.
Despite transferring ownership to the trust, you still maintain full control of your assets. While you’re alive, you serve as a trustee and can manage the assets as you please. The only thing that changes is the name on the titles, accounts, etc. As the word “revocable,” implies, you can change or cancel your trust at any time. The living trust also keeps your assets and financial affairs under the direction of your successor trustee in the case that you become mentally incapacitated. A will does not provide this protection and is instead subject to court rulings.
A living trust avoids the estimated 3-8 percent of your estate’s worth that would otherwise go to court costs, legal, and executor fees, with or without a will. Depending on the size of the estate, establishing a living trust for comparably more minimal costs can help save your estate tens of thousands of dollars.
Lastly, a living trust can provide peace of mind for you and your family. The trust can give you and your loved ones a plan tailored to your needs, privacy, and control. Remember, you can easily update or discontinue your trust, and the assets remain under the control of the trust even after death. To learn more about establishing a living trust, contact The Law Offices of Belgum, Fry & Van Allen.