Privacy and Living Trusts
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What Are the Rules Regarding Privacy and Living Trusts?
In some instances, property can be transferred to a beneficiary through a living trust rather than through a will. One of the main advantages of a living trust is that it gives the beneficiaries a greater degree of privacy than with a will.
The main reason for this is that living trusts don’t always need to be filed with the courts. In many cases, the property is simply distributed according to the instructions in the living trust, without ever having to pass through the court system.
In comparison, a will is usually filed with the probate court after the person’s death. It then becomes public record, meaning that any person can view the will documents. This then becomes one of the sources for a will contest or dispute- persons may learn of the properties and then try to challenge other survivors to claim the property.
What Can’t be Kept Private Through a Living Trust?
While a living trust doesn’t always need to be filed through the court, there are some issues that can’t be kept private through a living trust. For example, the following issues may affect privacy and living trust dispositions:
- Trust Terms: Some state laws require that trust terms be disclosed to beneficiaries (those inheriting property), if it is requested. The details will vary by state- some states require disclosure of only those terms that relate directly to the beneficiary. In other states, beneficiaries and close relatives can view the entire trust document.
- Real Estate: Real estate ownership is always considered to be public record. Thus, regardless of any transfers made in a living trust, real estate transfers can always be referenced in the county register of deeds or recorder’s office.
- Legal Actions: Lawsuits may require that a living trust be entered in as evidence. For example, if there is a dispute over property transfers, the trust documents may become part of the public record associated with the lawsuit.
Note that most of these issues usually have to do with a challenge to the property transfer. So, unless you’re anticipating a strong objection to your decisions, most of the information regarding your living trust should be kept private.
Do I Need a Lawyer if I Have a Dispute Involving Privacy and Living Trusts?
Transferring property through a living trust is a common way for people to avoid the probate process. A living trust can also help keep your property transfers confidential. If you have any issues, concerns, or legal questions regarding a living trust, you may wish to hire a lawyer to receive expert advice. Your attorney can also represent you in court during a lawsuit if necessary.
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Last Modified: 10-08-2013 03:04 PM PDT
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