Living trusts are one of the most utilized estate planning tools; however, they are one of the most commonly misunderstood documents.
So, what can a living trust do?
The biggest objective that a living trust can accomplish is avoiding probate. A living revocable trust can funded with most, or all, of your assets during your lifetime. The assets are owned by the trust, but you still have control over and use of the assets during your lifetime. At your death, the trust becomes irrevocable and the assets are distributed to the successor beneficiaries outside of probate.
Avoiding probate not only saves substantial time and money, but it also gives you additional privacy. Once a will enters probate, it becomes a public document and anyone can access it. This is not so for living trusts.
Just because living wills are such good estate planning documents does not mean that they are a “one-size-fits-all” tool. If you have a modest estate and aren’t concerned with creditors or possible will contests, a living trust may be overkill. Often times a well-drafted will is sufficient to accomplish your goals.
A word of caution: living trusts do not replace the necessity of having a will. A living trust is just one element of a well-drafted estate plan. In addition to your living trust, you should have a pour-over will (so anything not included in the trust during your lifetime is transferred into the trust at your death), a living will (also known as an advanced directive), a health care proxy, a power of attorney, HIPAA authorizations, and an appointment of guardianship if you have minor children.
If you think that a living trust is something you and your family would benefit from, please contact the attorneys at Broadbent & Taylor today to schedule a free initial consultation.