A pen and paper sitting on top of a last will and testament.

Four Reasons Why You Should Consider Having a Living Trust

A Living Trust provides the estate with a private and formal distribution of assets to your heirs upon death and can help your family/heirs avoid all the problems caused by probate. What’s so bad about probate and why should you consider having a Living Trust?

1. Going through probate can be very expensive. Large chunks of estates can be erased overnight. Probate consists of attorney, courts, and executor fees. And depending on the complexity of the estate, you can also incur appraisal, title, publication, recording, bond, and other fees that quickly add up.

2. Probate is not a quick process. There are some cases where estates have gone through probate for decades. Many factors can lengthen the time significantly. Things such as how many beneficiaries there are, where the beneficiaries live, will beneficiaries agree on the estate, will there be a contest to the will, is the estate taxable, and many other asset and estate complexities that can drag out the probate process.

3. Probate is a matter of public record. The probate process by law is open and available to anyone who wants to find out information about the estate and its heirs. In many states anyone can simply go down to the local courthouse and take a look at a list of the beneficiaries along with their addresses, the estimated value of the assets being probated, the actual will and trust documents, any remaining debts, and the contact information of the attorney handling the case. Does this sound like a goldmine for predators and creditors?

4. And most importantly, probate can destroy families. An estate without an estate plan is left up to the family/heirs and courts to work out. Many families can end up suing each other over a contested estate and ruin relationships for the rest of their lives. This “scorched earth†litigation can drag out for years and cause emotional, financial and physical stress. Some cases have even resorted to restraining orders and further civil and criminal litigation.

For the Living Trust to be effective, the assets must be properly conveyed or transferred to the trust. Real property (or titled property) must be retitled into the name of the trust. Specialty assets that do not have a title such as items with a high emotional value for the family (heirlooms, antiques, collections, etc) can simply be listed on an appendix to the trust document, generally known as a “Schedule Aâ€. The process of transferring assets to the trust is known as “funding the trust.â€

You might say, “But I have a will.†Plain and simple, a Last Will and Testament guarantees probate. A Living Trust along with other estate documents such as a will, can be the ultimate estate planning tool. With careful planning and using the proper legal tools, you can have the peace of mind that your estate will pass smoothly to your heirs without probate courts or family disputes.

“Four Reasons Why You Should Consider Having a Living Trust” Estate Planning, Asset Foundation. 22 August 2014. Web. 21 October 2015.