Revocable Living Trust – You can direct disposition of your property in either a will or a living trust in much the same manner. The difference is in administration. A will would have to be entered for probate at the time of your death. The primary purpose of a revocable living trust is to avoid probate. Typically, you would transfer your property out of your name as an individual into your name as trustee of your trust. During your lifetime, you would have the power to amend or revoke the trust, add property to the trust, and withdraw property from the trust. All income would be payable to you during your life exactly as it is now. A trust would provide that upon your death, the person you designate as your successor trustee would have the authority, and would be required to follow your directions with respect to disposition of your property. The successor trustee that you designate would have that power without the necessity of a probate or authority of a court. Typically, the administrative fees and costs are substantially less with respect to administration of a living trust as opposed to a court-supervised probate. Often disposition of your property can be accomplished through the use of a living trust within a few weeks as opposed to a year (or more) through probate.
In summary, benefits of a living trust (as opposed to a will) include:
- Avoids probate, including multiple probates if you own property out of state.
- Administration costs are usually substantially less.
- Prevents court control of assets in the event of incapacity.
- Provides for administration of all of your assets under one plan.
- Provides maximum privacy.
- Quicker distributions upon death.
- Assets can be retained in trust for minors or incapacitated persons.
- Estate taxes can be eliminated or reduced.
Probate and Estate Administration – If you have a will, as opposed to a living trust, at the time of your death the will must be offered for probate. Probate is a court-supervised proceeding that can take anywhere from nine months to one year or more to complete. A notice to creditors must be published, a petition for probate must be filed with the court, and the court must authorize distribution of your property following administration. An inventory of your property (and in most cases, a schedule of your creditors) must be filed with the court. The court must authorize the person you designate as executor to distribute your property. Typically, if a living trust is used to direct disposition of your property, a court-supervised probate can be avoided.
Trust Administration – If you have a living trust, as opposed to a will, a court-supervised probate is usually not required. Typically, a living trust designates a successor trustee and directs the trustee to distribute your property at the time of your death. Immediately upon death, the person you designate as your successor trustee has authority, by virtue of the Trust Agreement, to take possession of your property, settle your affairs and distribute your property as directed by you. The nature of your assets and creditors usually does not become public record, whereas if you have a will, as opposed to a living trust, during a formal probate administration, all of that information does become public record.
For more information, contact the Law Offices of Jack D. Brown, APC at (951) 698-0050 – www.jackdbrown.com