Do you need a “Living Trust”?
Not every family needs a living trust. This brief article describes what a simple trust is, its advantages, and whether one is necessary for you.
The main purpose of a trust is to save your loved ones the headache of having to go through the probate court process when you pass away. Depending upon the size of your estate, there may also be tax reasons for establishing a trust. This brief article cannot address those issues. However, the probate process is a costly and time-consuming task.
A living trust avoids this process because your trust name someone who will have full legal authority to carry out your wishes, as the trust directs them, after your passing. The person you appoint to perform this task is called your “successor trustee”. While you are alive, you can remain as the trust’s “trustee”.
This is the great advantage of a living trust. Here’s a simple example:
If you own title to your home, and only have a Will, then your loved ones are almost guaranteed that your estate will have to go through the probate process. Even though your Will clearly states, for example, that your children are to receive your home when you pass away, the title (deed) to your home still remains in your name when you die. Only you have the authority to transfer title, but you’re now deceased.
A title insurance company will need to guarantee that title properly passes from you to your children. However, the title company will not accept your Will as legal authority (anyone can “forge a Will”). The title company will require that your children take the Will to a judge and have the court sign an order that transfers title from you to your children. Eventually (one to two years later), the judge will sign the requested order.
With a living trust, you’ll avoid the probate process. You’ll execute a new deed to your home. This new deed will transfer title from you, to you, as the trustee of your new trust. That new deed will then be recorded in the County Recorder’s Office, and your new trust now owns title to the house.
Now, in this example, when you pass away, the person you named as your “successor trustee” has full legal authority to create a new deed that will transfer title from the trustee of your trust, to your children. There are a couple more steps involved, but this illustrates the value of a trust and how it can avoid the probate process.
If you don’t own a house, or any other property that would otherwise require a judge to order the transfer of title when you pass away, then you probably don’t need a trust.
If you do need a living trust, must you hire a lawyer to prepare it?
Not if it’s a simple estate (i.e., a house, checking and savings accounts, two cars, etc.). Of course if, after having read and digested all of the information contained on these website pages (Living Trust Advocate), you still feel uncomfortable with the basic concepts of living trusts, then you should consider hiring an attorney to help you prepare one.
However, if you’ve actually read all of these pages, then you’ll probably have a pretty good grasp of the how’s and why’s of living trusts. You might then be interested in considering an alternative to paying a stiff fee to an attorney.
Such an option exists. You’ll save probably $1,000 or more from the cost of hiring your own attorney, and you’ll still receive a valid, understandable, and legally enforceable living trust.
If you’re interested in this cost-effective alternative, then CLICK HERE.