Living Will Forms
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In this post, I discuss the revocable living trust and its advantages. Its flexibility has made it a popular estate-planning tool.

living trust

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If you have ever thought about making an estate plan, you have likely at some point encountered the will versus living trust debate. In this post, I will explain living trusts—otherwise known as inter vivos or revocable trusts—and their differences from a last will and testament.

Avoiding Probate

One of the significant advantages of utilizing a living trust is the ability to avoid probate. As I briefly mentioned in a prior post, property held in trust is not subject to the probate process and will pass automatically by the terms of the trust. This is because a trust is a legal entity existing separately from you, meaning that it continues to exist after you pass away. Therefore, by putting your assets into an inter vivos trust while still alive, you are able to continue to exercise the marks of ownership over the trust property, while also ensuring that the property bypasses probate upon your death.

For estates with assets worth less than $100,000, however, probate is generally relatively painless and inexpensive, and so if your estate qualifies and avoiding the rigors of probate is your only motivation for desiring a trust, the added upfront expense of setting up a trust may not worth it to you. It should be kept in mind, however, that even simple probates can sometimes become complex and expensive affairs. In addition, other advantages that the living trust offers provide further reason to consider a living trust as part of your estate plan.

As an aside, I usually recommend that clients with property located in more than one state have a living trust. This helps to avoid having to go through multiple probate processes in multiple states, which can be a significant burden even where the probate process runs smoothly. 

The Living Trust and Privacy

Probate is a matter of public record, and so your probated will will become a matter of public record. For those desiring privacy, a living trust can serve as a valuable tool, as the terms of the trust may usually remain private. While your pour over will—that is, a will naming the trust as the sole beneficiary of any property you failed to transfer to the trust during your life—will go through probate, the public record will reflect only that the property went to your trust. The terms of the trust remain private. Therefore, if privacy is important to you, you should definitely consider utilizing a living trust in your estate plan.

Planning for Incapacity

Another major advantage is the flexibility the trust provides in preparing for potential incapacitation. Carefully drafted trust documents naming a successor trustee will help ensure that someone you trust manages your property should you become incapacitated. This also can help avoid the often long and strenuous process of having a court name a guardian or conservator.

See Also:

Pros and Cons of a Living Trust

Introduction to Trusts


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