The popularity of creating a revocable living trust to manage one’s estate is growing in the US as well as in other countries.
Attorneys generally recommend that their clients create a trust, but not everyone really needs one.
You need one if you own real estate and don’t want your house to go through probate before it goes to your heirs, or if you have a net wealth of $20,000 and above.
People who reach out to our office about a trust tend to have the same or very similar questions. Below are the most common ones that living trust professionals hear every day regarding creating a trust.
1. What’s a Revocable Living Trust?
A living Trust is a legal instrument that gives control of any property you transfer into it to the Initial Trustee. This individual is usually the one who creates the trust, meaning you if you’re looking into getting a trust. An Initial Trustee is designated to control and manage any and all assets transferred into the trust after its creation.
A revocable living trust customarily names a successor trustee (there can be more than one) who is designated to take over the management of the trust upon the demise of the original trustee. If you wish to transfer your assets to your children after your demise, but wish to avoid them the headache and heartache of probate, you create a trust, place your assets into the trust and name a successor trustee (this can be your child, even if he or she benefits from the trust). Your child will then simply take over the management of the trust and distribute anything that is in the trust to all of your heirs.
During your lifetime, you retain full control over all the property you have transferred into a trust. Your successor trustee cannot take control over the trust during your lifetime, unless you become mentally incompetent. A good living trust has a clause that covers this.
2. Benefits of a Revocable Living Trust over a Will
The primary reason for choosing a living trust over a will is that a trust avoids your heirs the need to go through probate. Probate is the court procedure whereby the probate court gathers all of your assets, pays off all your creditors, and distributes any remaining assets to your heirs; it’s usually not done according to what you might have wished. The procedure can be extremely costly and can take quite a while.
A trust will keep your wishes, and what you bequeath to whom, private (unless you decide to make it public by filing it with the recorder’s office in the county where you reside).
If you don’t have a living trust naming a successor trustee, and no one has been named to take over the management of your affairs should become unable to do so yourself, the state could very well assign a stranger to manage your affairs.
3. Downsides of a Living Trust?
A trust might take more time to create than a will and is often more costly (depending on who prepares it for you). This is because a living trust covers more aspects of managing an estate, both before and after the death of the initial trustee (if you’re creating the trust, this is usually you).
Despite its higher initial cost, a living trust is a bargain, long term, when you take the cost of probate under consideration.
When you compare the expense of a will against the expense of a trust, consider whether your property will need to go through probate and figure out what that might cost. You are likely to find that having a trust to avoid probate is definitely justified, despite the higher cost.
There are many more questions you might have before you create your own trust. The best strategy would be to make a list and ask a living trust attorney. This is an important matter and not to be taken lightly, or to be rushed through. Your first step should be introspection into just exactly what it is you wish to see happen with your estate after your demise.
Your Next Step
If you find that you would benefit from a living trust, you can create one today for a very reasonable cost with us. Unlike many online living trust services, we are a solo attorney firm and the lawyer will actually talk to you over the phone about your trust after it’s been created—he will make certain that all the angles that need to be covered in your particular situation are covered. If any changes are needed after the review, we make them at no cost to you (unless there’s something extraordinary that needs to be done which happens in about 1% of cases).
We’re a full-service firm, by the way. We get the information the attorney needs to create the trust and you’ll have to sign it in front of a notary, of course, but other than that and discussing your trust over the phone with the attorney, it’s all done for you. Go here if you’re ready to proceed: https://livingwill-livingtrust.com