What is a living trust?
A living trust (more accurately a revocable living trust or RLT) is a legal document that contains a set of instructions – your instructions – on what you want to happen should you become incapacitate or die. A living trust allows you to remain in control of your assets while you are alive, provide for your (and your family’s) care should you become incapacitated, and to give what you want to who you want while keeping administrative costs down.
I have a Will, why would I want a living trust?
Because a Will only goes into effect when you die and does not avoid probate, it may not be the best plan for you and your family. Since a Will provides no protection if you become mentally or physically incapacitated, your family may have to ask the court to take control of your assets and appoint someone to conduct your affairs in your stead.
Fortunately, the revocable living trust, a simple, proven alternative to a Will, avoids probate and allows you to retain control of your affairs even if you are incapacitated.
What is probate?
Probate is a legal process in which the court validates your Will, sees that your debts are paid and your assets are properly distributed. If you have a valid Will, it will control the distribution of your assets, otherwise your assets will be distributed according to state law.
What’s so bad about probate?
- It can be expensive. Legal fees and other associated costs can easily run 3 – 5% of the value of your estate.
- It takes time. The average probate can easily take 9 – 18 months (sometimes longer).
- It is a public process. Once probate begins, your Will becomes a public document. Anyone can see what you own, who you owe, who your heirs are, what is being distributed to who, and when those distributions are being made.
If you would like to discuss your estate planning needs, Cameron Law is here to help.
For a complimentary initial consultation, call 507-206-4976
Still to come:
- About Living Trusts – Part 2 “Avoiding probate with living trusts“
- About Living Trusts – Part 3 “Trustees and Taxes“
- About Living Trusts – Part 4 “FAQ’s“