Whether YOU Need a Living Trust

By Lorie Burch, Owner & Founding Attorney of Burch Law

Creating a comprehensive estate plan is crucial to ensure that your assets are managed and distributed according to your wishes after your passing. One of the key considerations in estate planning is whether to create a living trust. 

A living trust, specifically a revocable living trust, can provide significant benefits, but it may not be necessary for everyone. Understanding the differences between a will-based estate plan and a trust-based estate plan can help you decide if a living trust is right for you.

What is a Living Trust?

A revocable living trust, often referred to simply as a living trust, is a legal document created to hold and manage your assets during your lifetime and to distribute them after your death. Unlike a Will, which only takes effect after you die, a living trust is active as soon as it is created. This means that you can transfer your real estate, bank accounts, investments, and other assets into the trust while you are alive.

The person who creates the trust is known as the Settlor or Grantor, and you can serve as the Trustee, managing the assets held in the trust. You can also designate a successor trustee to take over management of the trust in the event of your incapacity or death. This arrangement provides a seamless transition in asset management without the need for probate court intervention.

One of the main purposes of a living trust is to avoid probate court, a legal process that can be time-consuming, costly, and open to the public record. By transferring assets to a living trust, you ensure that your beneficiaries receive their inheritance without the delays and expenses associated with probate. Additionally, a living trust offers privacy, as the details of your estate are not made public, unlike probate proceedings.

Benefits of a Living Trust

Creating a living trust offers numerous benefits that can provide peace of mind and financial security for you and your loved ones. Here are some key advantages:

Avoiding Probate Court: 

As mentioned, one of the primary benefits of a living trust is that it allows your estate to bypass probate court. This not only speeds up the distribution of assets but also reduces legal fees and administrative costs. Probate can be particularly burdensome if you own property in multiple states, as it would require separate probate proceedings in each state. A living trust eliminates this hassle.

Maintaining Control and Flexibility: 

A revocable trust is a legal document that you can amend or revoke at any time during your lifetime. This flexibility allows you to adjust your estate plan as your circumstances change. You can add or remove assets, change beneficiaries, or update the successor trustee as needed.

Managing Incapacity: 

If you become incapacitated and unable to manage your affairs, a living trust ensures that your assets are managed by a trusted individual you have designated. This avoids the need for a court-appointed guardian and allows for seamless management of your assets according to your wishes.

Providing for Minor Children: 

A living trust can include provisions for the care and financial support of minor children. You can specify how and when your children will receive their inheritance, which can be distributed over time rather than as a lump sum. This ensures that their needs are met and provides oversight for their financial future.

Protecting Privacy: 

Unlike a Will, which becomes a public record upon your death, a living trust remains private. This keeps your financial affairs and the details of your estate confidential, which can be important for those who value discretion.

Asset Protection: 

While a revocable living trust does not provide asset protection during your lifetime (since you still have control over the assets), it can offer protection for your beneficiaries. You can include spendthrift provisions to prevent beneficiaries from mismanaging their inheritance or falling prey to creditors.

Planning for Special Needs: 

If you have a beneficiary with special needs, a living trust can be structured to provide for their care without disqualifying them from receiving government benefits. This ensures that their needs are met without jeopardizing their eligibility for essential support programs.

Ready to protect your future?

Incorporating a revocable living trust into your estate planning can offer significant advantages, including avoiding probate court, maintaining privacy, and providing for minor children and beneficiaries with special needs. 

While not everyone needs a living trust, consulting with estate planning attorneys can help you determine if this type of trust is the right estate planning tool for you. By creating and funding the trust properly, you can ensure that your assets are managed and distributed according to your wishes, providing peace of mind for you and your loved ones.

Burch Law
Scroll to Top