When you discuss your options with an estate planning attorney, you will learn about the revocable living trust. This device is a popular alternative to a simple will because it provides benefits that are simply not there when a will is utilized.
The executor that is named in a will would admit the document to probate, and the court would provide supervision during the administration phase.
Creditors must be notified about the passing of the decedent, and they are given time to come forward seeking payment. The executor will identify and inventory the assets, and this can be easier said than done in some cases.
If anyone wants to contest the will, they have an open window of opportunity during the probate process, because the court examines the will to determine its validity. This is called a “proving of the will.”
All this takes time, and no inheritances are distributed until the estate has been probated and closed by the court. There are expenses that accumulate, and this will eat into the inheritances that will eventually be received by the heirs.
Another disconcerting element is the loss of privacy. The records are available to anyone that would like to access them, and this information can raise eyebrows and potentially cause hard feelings.
When a living trust is used as a vehicle of asset transfer, the trustee would distribute the assets outside of probate. There would be no court involvement, so the negatives that we have described would be avoided.
Other Living Trust Benefits
In addition to the straightforward avoidance of probate, the assets are neatly listed on a schedule, so the identification and inventory process is simplified. To account for any property that may have never been conveyed into the trust, you can include a pour over will in your estate plan.
This type of will would allow the assets to be absorbed by the trust, so there would be eventual consolidation.
A significant percentage of elders become unable to handle their own affairs at some point in time. Alzheimer’s strikes over 30 percent of the oldest old, and this is not the only cause of incapacity.
When you have a living trust, you would act as the trustee while you are alive and fully competent. When you are drawing up the trust declaration, you name a successor trustee to assume the role after your death.
You can also give this successor trustee the ability to step into the role in the event of your incapacity.
If you have concerns about the money management capabilities of someone on your inheritance list, you can include a spendthrift provision. The trust would become irrevocable after your death, and the principal would be out of the reach of the beneficiary and their creditors.
You can leave instructions in the trustee concerning the way you want your assets to be distributed to the beneficiary. The trust can remain active for an extended period of time, and the trustee could provide incremental distributions on an ongoing basis.
A family member or someone else that you know can be designated as the successor trustee, and you could alternately use a professional fiduciary. If you name someone that is not a professional, they may face a learning curve.
Under these circumstances, legal assistance can be invaluable. We can be engaged to provide guidance during the trust administration process, and we would be uniquely qualified to do so if we draw up the trust for you during the planning stage.
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Each situation is unique, and there are many approaches that can be taken. Personalized attention is key, and this is what you will receive when you choose our firm.
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