A trust, also known as a revocable living trust, is a legal document that allows you to transfer ownership of your titled property (land, cars, home) and your personal property (coin collections, furniture, fishing equipment) from your name into a trust which you control.
A living trust is a legal contract that when written and used properly, will allow your matters to be handled privately if you are incapacitated or die. Things in a trust are passed to your named heirs with no court involvement. A living trust keeps you and your family out of court avoiding unnecessary expense and delay.
People who die owning property and assets, either with a will or without a will, risk leaving their loved ones to face the ordeal of probating an estate. Probating an estate is the legal term for going to court to get the name of a person who has died off a title and getting the name of a live person onto the title. This is referred to as transferring ownership. This probate court process can take a year or more to complete.
To protect your loved ones from the stress of probate if something unexpected happens to you, consider a living trust.
The Benefits of a Living Trust
A trust keeps you in control of how your belongings, property, and assets are distributed to the people you choose to be your heirs. A trust can be changed or revoked while you are alive and mentally able to make your own decisions.
A trust keeps your heirs out of probate and avoids the expense of probate. A trust takes much less time than probate and gets your property to your heirs more quickly. Avoiding probate and getting your property to your heirs more quickly means less stress for your loved ones at a difficult time of loss and grieving.
A trust maintains your privacy. A trust can be used as a prenuptial agreement. And it can reduce estate taxes.
Probate is the legal process through which when you die, your bills are paid and your property is distributed. Probate court distributes your property based on what your will says. If you don’t have a will, the probate court will distribute your property according to a set of laws written by people who have never met you who have tried to guess the best way to distribute your assets to your heirs.
Despite what many people think, a will does not avoid probate. Wills must be probated in probate court. Once the probate process begins, you and your family lose control. The court takes over. Probate is painstakingly slow, inflexible, and expensive.
Until the probate process is completed, property cannot be distributed. The probate court, not a child's guardian will control a child's inheritance until the child reaches the age of distribution set in the will. Again, probate court can take a year or more to complete.
Probate costs an average of 5 to 10% of the value of your estate. The percentage is controlled by law and depends upon the size of your estate.
Probate court records may be inspected or viewed by anyone. They are open to the public. People who value their privacy for themselves and their families may want to consider a trust.