When does it make sense to have a living trust?
A comprehensive estate plan is going to consist of various components depending upon your specific situation. A bare bones estate plan would consist of a will and a durable power of attorney. A will is a very basic document that outlines who will get your assets when you die and may also name guardians if you have children who are minors.
Choosing a Power of Attorney is a key component to an estate plan because this person will act in your stead when it comes to making financial decisions if you should become incapacitated.
Some other documents to seriously consider adding to your estate plan are a living trust and a medical directive. A medical directive will provide very specific directions for your medical care; for example, if you do not want to be put on life support, that would be included in this type of directive.
When does it make sense to have a living trust included as part of your estate plan? If you are unsure, there are some considerations that may help you decide if a living trust is advantageous for you.
Without a living trust, some or all of your estate will most likely have to go through the probate process which can be time-consuming, costly, and public. Depending upon the amount of wealth you have and if you have assets that would be subject to probate, by transferring them into the trust, your beneficiaries can avoid the hassles and expense. If you own property in multiple states, there is a good chance you will have to go through probate in each state where the real estate is held.
With a living trust, you continue to have control over the assets in the trust while living, as long as it is revocable, and you can also set rules pertaining to how and when your beneficiaries receive their inheritance. So, in essence, a living trust is all about control and wishes.
Are living trusts complicated?
Complicated living trusts are a concern for many who are uncertain about dealing with the various legal implications. The truth is that living trusts are really no more complicated to create than a last will and testament. However, after creating your trust, you will retitle assets from individual ownership to the trust. This can be time-consuming and a bit of an administrative hassle depending upon the types of and amount of assets you have. But, by planning ahead for the distribution of your assets, the transfer process to your heirs becomes simpler.
In the end, some additional paperwork, recordkeeping, and some added expense is worth the time to help your family avoid the stress and expense of dealing with probate after you are gone.
How much do they cost?
The question that many people have for an estate planning attorney is how much does it cost to set up a living trust? At the Law Office of David W. Foley, California Living Trusts, our fees are low because our process is streamlined. Call to schedule a free consultation.