For an effective
estate plan, it is important to note the many advantages a living
trust provides that a last will and testament does not. Here is a
quick review.
• Trusts save valuable time and money by avoiding probate. A
living trust bypasses the red tape associated with probate, or court
involvement in the transfer of your assets at death. The property
you transfer into a living trust before death does not need to go
through probate. The trustee you have selected, rather than the court,
transfers ownership to your chosen beneficiaries. When property is
passed with a will, via probate, the process results in months of
court involvement and hours of the personal representative’s
precious time. The money expended to probate an estate is often three
times what a typical trust would have cost.
• Trusts maintain privacy and may offer protection from creditors.
As a last will and testament requires probate, probate requires court
involvement, and court records are accessible by the public, any Tom,
Dick or Sally can peruse the court’s proceedings to find out
how much the decedent was worth, how much was owed to whom and, ultimately,
who was left what. Trusts maintain the confidentiality of both the
decedent and the recipients of the decedent’s estate. This privacy
will offer a certain amount of creditor protection, as creditors will
not have the ease of simply looking up probate matters to determine
where the property of an estate went.
• Trusts offer greater flexibility in how and when beneficiaries
receive their inheritance. Trusts allow you, through your trustee,
to control after your death how and when your named beneficiaries
are to receive your property. The trustee is bound by the instructions
of your trust. For example, if you are the parent of children whom
you would like to receive their inheritance after completion of a
four-year degree or upon the purchase of their first home, you may
arrange for this by drafting these instructions in your trust. If
monies are passed to a minor child through a simple will, in addition
to the expense of probate, a conservatorship for the minor be appointed,
a process that only adds to the court involvement, fees and attorney’s
billed hours.
These are a few of the many benefits derived by the use of a living
trust, rather than a last will and testament, as one estate planning
tool. With this understanding, seek the advice of an attorney who
will further explain which trust options best fit your particular
situation, and how to achieve the objectives you deem most important.
Give either Ken Barney or myself, Alan Soelberg, a call.
