Is A Living Trust All It’s Cracked Up To Be?
March 5, 2012 § Leave a comment
Weekly Law Blog
Ideally, we would all like to leave our heirs a trouble-free inheritance, which is why some people create a living trust. One of the main reasons seniors choose a living trust is because it is touted as a way to avoid the time and expense of probate when leaving property to heirs. When going through probate, it can take months before your heirs receive any inheritance. And, if you have property in another state, your heirs will have to wait for probate in that state as well!
If created and administered properly, a living trust can result in the avoidance of probate after your death. However, if the trust is not funded properly initially, or if you acquire property after you create your trust, and don’t also transfer that property to the trust, those properties will still be subject to probate, which undermines the whole reason for creating the trust in the first place. So while a trust is a good idea, it needs to be created and administered properly.
Assuming your trust is created and administered properly, another advantage to having the trust is that it will take effect while you are still living, unlike a Will. Additionally, you can provide in the trust for someone to administer your property through the trust in the event of your incapacity. In that way, you may also possibly avoid the probate court for a guardianship proceeding.
It should be kept in mind, that some people may qualified for a simplified probate procedure that does not require going through the court systems if their estate is very small. Additionally, you can limit the number of assets subject to probate by having named beneficiaries properly listed on applicable assets. A good example of this concept is life insurance or an IRA.
Of course there are do-it-yourself programs available but properly creating and executing a valid trust consists of a lot more than merely printing out canned trust language. There are state laws concerning the validity of the trust, administration of the trust, and of course, you need to know how to properly fund the trust. Consulting with an attorney to help you create a living trust is money well spent to make sure the document is drawn up correctly and to be certain that all necessary properties are considered.
If you need help trying to decide if a living trust is right for you, please feel free to contact the Law Office of Dawn M. Weekly, PC. The law firm is located in Sandwich, Illinois and focuses on elder law and Life Care Planning for clients. Their office may be reached by calling 815-570-2334.