Estate planning is like getting an oil change for your car or going to the dentist. There are other things you’d rather be doing. However, you know these are things you must do to avoid far more expensive problems later on. Estate plans are personalized, based on your needs and situation. One strategy you may want to consider is a living trust, as explained in a recent article from MSN, “3 Reasons to Seriously Consider Using a Living Trust to Pass an Inheritance to Your Family.”
One of the reasons for having a living trust is to avoid the probate process. This is a legal process where a court decides if the will is valid, approves the executor and oversees the distribution of assets left through the last will and testament. If a person owns property in multiple states, probate must take place in each state. Probate can take months or, in the case of complicated estates, years. A living trust distributes assets to beneficiaries without the court's involvement.
Passing assets through trusts provides more privacy than going through a will and, hence, through probate. When a will goes through the probate process, it becomes a public document, and anyone can read it. This means your will could be read by disgruntled family members, creditors, an ex-spouse, or thieves looking for victims.
Details about a living trust, including assets, beneficiaries and terms of the trust, aren’t part of the public record. This is useful for two reasons—avoiding potential conflicts with those who did and those who did not receive inheritances and shielding recipients from potential scammers. Sadly, there are numerous cases of families who fought bitterly over inheritances after they obtained the will from the local courthouse.
Living trusts offer a great deal of flexibility. They can be modified in any way desired by the grantor (the person creating the trust) if they are living. The trust can be modified to reflect life events like marriage, divorce, death, or financial changes. Having the ability to make these changes works well for those concerned with aligning their wishes with their estate plan.
One final note: when you create a trust, you must place assets in the trust to fund it. This usually occurs by retitling the asset to be owned by the trust and not by the grantor. Your estate planning attorney can help make sure you do this last step. Failing to fund the trust is critical for it to perform as you want.
Discuss your overall estate plan with your estate planning attorney. There are many different types of trusts. The attorney will be able to help you decide which one is best suited for you. You’ll also want to be sure any trusts created align with your estate plan.
Reference: MSN (Feb. 3, 2025) “3 Reasons to Seriously Consider Using a Living Trust to Pass an Inheritance to Your Family”