You won’t live forever. Having realized that fact, the question is: when you die, will you leave your family with an absolute headache to accompany their heartache? Will you leave the state to decide on the distribution of your assets or will you decide? If you allow the state to decide, you subject your loved ones to the costly and timely process of probate. The number one error people make in regards to estate planning is procrastination.
The benefits of a living trust are plenty:
Probate is the legal process of settling the estate of a deceased person. The state courts decide upon the distribution of assets in a costly and timely process. Probate often takes a few months to a year and the typical cost to probate an estate is in the range of 3% to 7% of the total estate value. Avoiding probate is one of the benefits of a living trust.
Reduce or eliminate costly estate taxes. Once the gross estate has been accounted for, certain deductions are allowed in arriving at a “Taxable Estate”. In its current form, the estate tax only affects the wealthiest 2% of all Americans.
Maintain complete control over your assets while you are alive. As your trust’s trustee you can still buy, sell, borrow or transfer your assets. Upon incapacity, your property will be managed by your named successor trustee.
Avoid a Family Dispute
To contest a revocable living trust, one must have to prove that the grantor was incompetent or under undue influence not only when the trust instrument was signed, but also when each property was transferred to the trust, when each investment decision was made, and when each and every distribution was made to the owner or anyone else. That is virtually impossible to do.
Revocable living trusts are private; they don’t get filed with the probate court, and no one gets to look at them unless the grantor or the trustee allows it.
Property Management after Death
Name your trustee. A Living Trust can provide for the care, support and education of your children by turning over assets to them at an age chosen by you. Even insurance proceeds can be paid to the trust so your successor trustee can manage them for the benefit of your family.
Modify the terms of your trust as you like. A revocable living trust offers the grantor the freedom to change the terms or cancel a living trust.
A Living Trust is recognized as valid in every US State.