When you pass away, you want to make sure your inheritance goes to your family quickly and easily. But if you rely on a will to pass along your assets, your family will have to wait for a probate court’s ruling. Probate court can take time, and during the process, the contents of your estate become public information.
You can create a living trust to avoid probate. A living trust – also called a revocable trust – can make the distribution of your inheritance easier on your family. Here are a few benefits you can find in a living trust:
- Avoid probate – After you pass away, anything you own must go through the probate process. But since a trust is a separate entity, you can transfer ownership of your property to it. Since the trust technically owns that property when you die, a probate court doesn’t have the authority to rule on its distribution.
- Distribute your inheritance quicker – As opposed to probate, your heirs can receive the distribution of your estate almost immediately. They won’t have to wait for the probate court ruling to pay for funeral costs.
- You call the shots – A living trust gives you the power to decide what happens with your estate. You can be both the trustmaker and the trustee, the person who manages the trust. And since it is revocable until you pass away, you can change what’s in the trust and who receives your assets.
- Choosing a successor trustee – A living trust also protects you if you become incapacitated. When you set it up, you choose a person you can depend on as a successor trustee. If you can’t communicate due to an illness or injury, the successor comes in to manage and protect the assets in your trust.
- Stay private – Unlike a probate court, which becomes permanent record, your trust keeps the details of your estate private.
Despite all the advantages, setting up a trust and transferring all your property to it can be difficult. And unlike other trusts, a living trust doesn’t offer any tax benefits. You may want to speak with your attorney when considering a living trust.
A living trust can be a significant part of a successful estate plan. You can use it to distribute your assets while avoiding the challenges of a will and probate.