The Value Of Living Trusts
After considering whether a will is right for you, you may want to consider a living trust. Setting up a living trust allows you to avoid probate while still maintaining a very high degree of certainty that your estate will be handled by the people who choose in the manner you want it handled. Unlike a will, there is additional work to be done immediately after you sign the document. You (and/or the attorney) need to follow up the signing of a living trust by transferring assets to the trust.
A living trust is more complex, more expensive and more time-consuming to set up, but it eliminates all of the cost and delay of probate on the back end and makes the handling of your estate much more streamlined, simple and less costly after you are gone. The additional cost and the additional work involved at the front end pays dividends in less work, less cost and less delay at the back end.
Whether to choose a living trust as the primary vehicle of your estate planning is not a right or wrong or one-size-fits-all answer. Each person needs to weigh the benefits against the costs, weigh the burdens against the limitations and make an individualized decision. The key is in understanding the cost-benefit analysis for you so that you can make an informed decision.
How A Living Trust And A Will Work Together
If you are using a trust as the primary vehicle of your estate planning, you can still do a will, but the will is only done to address assets that don’t get transferred to the trust during life. You may still have some assets with beneficiary designations that will go directly to those beneficiaries when you die. In practice, these “options” are not mutually exclusive. They are all tools that can be employed together in a comprehensive plan that accomplish your goals.
Your decision on what estate planning tools to use should be made with some comparison and understanding of those various options. Any experienced and reputable estate planning attorney can fill in the blanks in your understanding of those various options and guide you in using those tools to match your preferences and your circumstances.
We will unpack what a trust is, how they work and how they can be used to accomplish your estate planning goals in the article, Avoiding Probate is a Matter of Trust.