Yes, a living trust, also known as a revocable living trust, is a powerful tool not just for estate planning after your passing, but also for actively managing your assets during your lifetime—providing flexibility and control that a will simply cannot offer.
What are the benefits of a living trust over a will?
While a will dictates how your assets are distributed *after* death, a living trust allows you to manage those same assets while you’re still alive, but perhaps unable to do so yourself due to illness, injury, or simply a desire for assistance. Approximately 55 million Americans have a living trust, a figure that is rising as people seek greater control over their financial futures. A key benefit is avoiding probate, a potentially lengthy and costly court process, which can save your heirs significant time and money. Furthermore, a trust can offer privacy, as trust documents aren’t typically public record like wills are. You, as the grantor, retain control as trustee, or appoint someone you trust to manage the assets according to your instructions. This offers a seamless transition of management should the need arise, even while you’re still living.
How does a living trust protect me if I become incapacitated?
One of the biggest advantages of a living trust is its ability to provide for management of your assets if you become incapacitated. Imagine Mr. Abernathy, a retired architect who meticulously built a real estate portfolio over decades. He suffered a stroke, leaving him unable to manage his properties or finances. Without a trust, his family had to petition the court for conservatorship, a process that took months and involved considerable legal fees. A trust, however, would have automatically designated a successor trustee to step in and manage his affairs, avoiding that stressful and expensive process. A properly drafted trust allows you to name a successor trustee who can seamlessly take over management, paying bills, handling investments, and ensuring your needs are met, all according to your pre-defined instructions. This avoids the need for court intervention and ensures your wishes are respected, even when you’re unable to express them yourself.
What happens if I don’t properly fund my trust?
Creating a trust is only half the battle; “funding” the trust is equally critical. Funding means transferring ownership of your assets – real estate, bank accounts, investments – into the name of the trust. I once worked with a client, Mrs. Davies, who meticulously drafted a living trust but never transferred ownership of her primary residence into it. When she developed Alzheimer’s, her family discovered the house remained in her name, requiring a probate proceeding *despite* the existence of the trust. This error negated much of the benefit the trust was meant to provide, costing them time, money, and emotional distress. Without proper funding, the trust remains an empty vessel, and your assets will still be subject to probate. It’s crucial to work with an experienced estate planning attorney to ensure all assets are correctly titled in the name of the trust.
Can a living trust be changed or revoked?
The beauty of a *revocable* living trust is its flexibility. You, as the grantor, retain complete control and can amend or even revoke the trust at any time during your lifetime, as long as you have capacity. I had a client, a successful entrepreneur named Julian, who initially set up a trust with specific provisions for his children’s education. Later, after his youngest child received a full scholarship, he realized those provisions were no longer necessary. He was able to easily amend the trust to redirect those funds to a charitable foundation he supported. This ability to adapt to changing circumstances is a significant advantage over a will, which is a static document. However, it’s important to document any changes formally with the help of an attorney to ensure they’re legally binding. Revocable trusts offer the peace of mind knowing you’re in control, even while planning for the future.”
Who Is Ted Cook at Point Loma Estate Planning Law, APC.:
Point Loma Estate Planning Law, APC.2305 Historic Decatur Rd Suite 100, San Diego CA. 92106
(619) 550-7437
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