A particular kind of trust that is established while the creator is still alive is known as a living trust. The grantor and beneficiary can sidestep the probate process with a living trust. To clarify, the trustee is the individual designated to oversee the trust’s finances. In some circumstances, you may serve as your own living trust’s trustee, in which case you would be in charge of all trust assets.
The main benefits of living trusts or inter vivos trusts include, but are not limited to, avoiding probate for particular items listed in the will, lowering estate taxes and other fees, and long-term property management setup.
Again, each state will have different laws governing living trusts. Your objectives and requirements with regard to your estate and assets will play a big role in your decision to create a living trust.
Moving property into the living trust before your death could skip the probate procedure. All of the assets you add to the living trust will then pass to the beneficiaries without going through the probate process. The “successor trustee” is the individual you designate to manage the trust after your passing; they are in charge of distributing property to the trust’s beneficiaries.
Typically, this process has no fees, which is rather quick. The living trust is no longer necessary once the property has been given to the designated beneficiaries because its intended use has been achieved.
Which is Simpler, Writing a Will or a Living Trust?
Wills are not seen to be any more sophisticated than living trusts. As a result, rather than focusing on which approach would be the simplest to complete, you should decide whether a living trust is the correct choice for you.
Since there are so many different types of property that can be included in a living trust, the living trust can sometimes be rather flexible. But occasionally, living trusts are not necessary.
Therefore, it is important to consider the differences between a will and a living trust.
Examples of such factors might not be limited to but include:
- Writing a will typically takes less time than drafting and maintaining a living trust;
- The costs of drafting a living trust may be more expensive than those of drafting a will;
- Living trusts can occasionally assist people with big estates to save a significant amount of money by avoiding certain types of taxes;
- A living trust may give older persons who are more likely to pass away within ten years greater direct influence over how their assets are distributed;
- For younger persons who are not nearing the end of their life expectancy, a will is typically more appropriate;
- While a living trust is better suited for managing a larger estate with more assets, wills are an effective way to distribute your property if you do not have a huge estate or many valuable assets; and
- If you own your house in joint tenancy and are married, you can leave the majority of your estate to your spouse.
- Joint tenancy may be used to hold or own bank accounts. Additionally, avoiding probate is typically quicker, less expensive, and less necessary if you reside in a community property state.
What Laws Apply to Privacy and Living Trusts?
In rare cases, a living trust may be used to transfer property to a beneficiary instead of a will. A living trust’s ability to give beneficiaries more privacy than a will is one of its key advantages.
Living trusts do not always need to be filed with the courts, which is the fundamental explanation for this. The property is often simply dispersed in accordance with the living trust’s instructions without ever going through the courts.
In contrast, a will is often submitted to the probate court following a person’s passing. After that, the will’s documents are considered public records and accessible to everyone. Once others learn about the properties, they may try to challenge other survivors to claim the property, which then becomes one of the sources for a will contest or dispute.
What Are A Few Of The Drawbacks Of A Living Trust?
The following are some specific drawbacks of living trusts:
- Limitations: In some cases, living trusts may not cover the entirety of the estate. As a result, naming the property that is included in a living trust must typically be quite detailed;
- Power of Attorney: Even though a living trust is legally enforceable, it may still be required to establish a lasting power of attorney. This is due to the possibility that a successor trustee may not always have complete authority to handle assets not under the trust; and/or
- Confusing Terms: Having a living trust might be confusing, particularly if some of the terms conflict with those in other legal documents, such as wills or other trusts.
As was already indicated, depending on your particular needs, the qualities of a living trust may be advantageous to you. For instance, if your estate is quite small and you simply wish to transfer one specific piece of property to a person, you can decide against covering your entire estate. This is when the restrictions connected with a living trust could really serve your interests.
What Information Cannot Be Kept Private Via a Living Trust?
Although a living trust need not always be filed with the court, there are some matters that a living trust cannot keep hidden. For instance, the following concerns could impact living trust dispositions and privacy:
- Trust Terms: According to some state legislation, beneficiaries (those who inherit property) must be made aware of the trust terms upon request. The specifics will vary depending on the state; some states simply need disclosure of clauses that directly affect the beneficiary. In some areas, beneficiaries and close family members have access to the full trust agreement.
- Real Estate: The ownership of real estate is always regarded as public information. Real estate transfers can therefore always be found in the county register of deeds or recorder’s office, regardless of any transfers done through a living trust.
- Legal Recourse: A living trust may need to be entered as proof in court cases. For instance, if there is a legal disagreement regarding property transfers, the trust documents may end up in the public record that is connected to the legal proceeding.
Keep in mind that the majority of these problems typically include an objection to the transfer of property. Therefore, the majority of the information pertaining to your living trust should be kept secret unless you anticipate receiving a solid protest for your choices.
Do I Need a Lawyer if I Have a Privacy or Living Trusts Dispute?
People frequently use living trusts to transfer property without going through the probate court system. A living trust can also assist in protecting the privacy of your property transfers. You might want to consult a living trust attorney for guidance if you have any problems, worries, or legal inquiries regarding a living trust.
If required, a qualified attorney in your area can also represent you in court during a lawsuit or other proceedings. Use LegalMatch to find the right lawyer for your living trust dispute right away.