What is a living trust? A trust is a formal agreement you make with a trusted person, or trustee, to convey property as directed by you. A living trust is a trust that you create during your lifetime. These documents are in effect regardless of whether or not they contain property until your death.
Perhaps the greatest asset to utilizing a living trust is the ability to avoid probate because they pass to beneficiaries under the terms of the trust and not a will. Probate is the court system in which a person’s affairs are wrapped up subsequent to their death. Probate is costly, lengthy, and unnecessary for most estates. By dividing your property in a living trust, you are able to avoid this process and future headache for your loved ones. Property can be distributed to beneficiaries after the death of the grantor without incurring any fees or court interference.
Another benefit of a living trust is that it remains private. The contents of a will become a public document. Many people choose this route to keep their affairs private. Also, while wills can be challenged through lawsuits, it is infinitely more difficult to attack a living trust.
Unlike wills, however, a living trust requires the signature and stamp of a notary public. Also, while a will can appear in any format, property left through a living trust must be first transferred into the trust. For items such as real estate, which include title documents, retitling must occur so that the owner of the property is the trust.
WHY A WILL THEN?
You might be asking yourself why a will is even necessary? Make no mistake, they are vital.
First off, a will can pass on certain rights that a trust cannot. It is only in a will that you can name legal guardians for children, as well as someone to manage any properties left to or earned by minors.
A will also gives you the right to name an executor who will be in charge of wrapping up your estate after your death. That person communicates with the court, pays your bills, and eventually distributes any property that has to first pass through probate. Living trusts do not allow for an executor, and rather names a successor trustee who will solely manage the property left through that trust.
A will also gives you the ability to leave instructions regarding how you want your debts and taxes to be paid, as well as forgive any debts owed to you. Wills are far simpler to create and require only the presence of two witnesses who will not receive anything under the will.
Both a living trust and a will help the process of divvying up your estate, and can each accomplish different tasks to make the entire ordeal less harrowing for your beneficiaries. The presence of experienced and knowledgeable attorneys is vital to the process. The Orlando Law Group provides both trust and will creation services. Call 407.512.4394 for more information!