Estate Planning Lawyer
A living trust can be a valuable estate planning tool. Sometimes it is recommended in place of a will. However, while a living trust can accomplish many of the same tasks that a will can, often in a way that is more convenient for you and your surviving loved ones, there are limitations to what a living trust can do for you. Often, though not always, an estate plan requires both a living trust and a will.
Benefits of a Living Trust
A will and a living trust are similar in their most basic function of expressing who is to receive what property after you die. A will is revocable, meaning that as long as you are alive, you have the ability to make changes to it. Most living trusts are also revocable until you die, but that is not a given.
In many respects, however, wills and trusts are more different than they are similar. A will only takes effect after you die, while a living trust takes effect as soon as it is funded, i.e., you transfer assets into it. You retain the ability to manage your own property held in trust as long as you live. A living trust also offers the following advantages:
- Privacy
A will is a public document, while a trust is a private one. When you use a living trust, details about your estate will not leak out into the public, whereas the contents of a will sometimes can.
- Probate Avoidance
Property held in trust is not subject to probate the way the contents of a will are. A living trust can save your heirs a good deal of time and money and allow them to receive their inheritance more quickly.
- Incapacity Planning
Because a will only takes effect when you die, it has no bearing upon what happens to your property if you become incapacitated. However, a trust can be created to take effect in the event of either your death or incapacity.
Limitations of a Living Trust
For all its potential advantages, a trust does nothing for you and your beneficiaries if you do not transfer any property into it. This may seem obvious, but there have been examples of grantors creating trusts and then failing to fund them, making them worthless to the beneficiaries.
If you have underage children, you need to name a guardian to take care of them in the event of your death. This cannot be accomplished with a trust; it requires a will.
When it comes to upfront costs, trusts are more expensive than wills. Some jurisdictions have expedited probate processes that make a trust unnecessary for smaller estates. To fully understand your options, contact a law office to arrange a consultation with a Folsom, CA living trust lawyer.
Thanks to Yee Law Group for their insight into estate planning and living trusts.