A living trust Nolo is a handy real estate planning tool that people use to name a person who will get their assets after their death. They work similar to wills, but the benefits are vital after the person who creates the living trust dies.
Assets that are subject to the living trust are under the control of the person/people named to take charge of a successor trustee. These people have the authority to distribute the goods to heirs without additional procedures. This feature saves everybody a lot of effort and transfers the assets to the person/people the living trust creator chose to inherit it faster.
Avoiding Probate With a Living Trust
Property people add into their living trust while they are alive doesn’t need to go through probate. The one who they determine to take control over the living trust when they leave this world automatically passes ownership to the heirs they pointed out in the living trust.
In most cases, the entire process lasts only a couple of weeks and doesn’t include any court or lawyer fees heirs should pay.
Common Questions About Living Trusts
What Is Probate?
Probate is a typical legal procedure that places a legal role upon someone in the case of death. A probate covers:
- Proving that a dead person’s will is legitimate in the court
- Identifying the property the deceased person owned
- Evaluating the property
- Paying taxes and debts
- Dealing out with the remaining assets as the will directs
Probate includes paperwork and court presences by attorneys. The family will pay all the attorney fees and all court fees from the land property, otherwise, this money will go to those who inherit the departed person’s assets.
How Living Trusts Avoid Probate
An unbelievable percentage of people leave their money and property to their children, so they want to avoid probate because they don’t want some of their money to go to probate lawyers instead of their children or other heirs they have chosen.
That is why they pick the living trusts as an ideal option that will help them avoid probate and probate fees. Married couples also choose to create a living trust to seamlessly transfer both separate properties and co-owned properties.
Why You May Not Need a Living Trust?
A living trust is exceptionally beneficial for those who own sizable real estate properties and for older citizens, who are likely to leave this world in the next 10 years. So, not all of us need a living trust at the moment, but it is up to you to decide.
If you still doubt whether you should create a living trust, pay attention to the following factors:
- Your age: Knowing that you won’t get any advantages from the living trust while you are alive, raise the awareness that the middle-aged population who feel healthy doesn’t need this living trust.
Another reason people under the age of 45-50 don’t need this option is the fact that all the laws change constantly, and new opportunities pop up regularly. It means that soon we can expect new upgraded versions of trusts and wills to show up on the market.
- Your wealth: Except for age, another significant factor in determining whether you should create a living trust is your wealth. So, the richer you are, the higher amount of money you can save for your heirs by avoiding probate, but it depends on the person the most.
- Your marital status: If you are wedded, and you and your partner have an intention to leave the assets to one another, the chances to create a living trust to avoid probate are lower at an early age. But, in case you have your extensive properties together, then you should know that probate isn’t necessary for all those assets. Some states offer a surviving partner to try advanced probate procedures for their separate properties because they are cheaper and faster than standard probate.
Revocable Living Trusts
Almost all living trusts are called “revocable living trusts” because they give you an option to change them if your wishes or circumstances change. These trusts are named living because people create them while they are still alive.
Lawyers often call this inter vivos, which is Latin for while alive, or between the living.
Other Advantages of a Living Trust
The key benefits that revocable living trusts bring along are that it shortens the time for transferring the assets and saves money for the family because it avoids probate fees after the real owner deceases. But there are some other advantages of a living trust as well.
- Protection from court challenges: Unlike challenges to traditional wills, living trust court challenges are quite rare. But in case there is a court case, it’s much more difficult to attack a living trust than a widely-used will.
- Avoiding a conservatorship: Creating a living trust might be exceedingly practical if a person who creates it will become incapable in the future, due to mental or physical illness. It means that if the owner isn’t capable of taking care of their finances, but has already created a trust and named a partner, things will be easier for everybody. The partner will take care of all the property and will send it to the right hands one day.
Living Trust FAQs
Is a Living Trust Public?
A living trust, unlike a will, gives you and your family more discretion. If you own a living trust, you will be able to keep your documents private while you are alive. So, it offers better privacy than any other similar document.
Do Living Trusts Protect Assets from Creditors?
If you are ready to go through all the procedures to create a trust to keep your cash and other assets, you must undoubtedly believe that you’re protecting those possessions.
But the truth is different. Some trusts are powerful enough to protect your family’s possessions from claimants and creditors, indeed. However, the garden-variety living trust, which is typically used when planning the estate, may not be enough protected from predators.
Can I Get a Reverse Mortgage if My House Is in a Living Trust?
A reverse mortgage offers additional revenue to cover renovations, home repairs, basic living expenses, or even unanticipated expenses. Even though there are some limits and requirements, you can get a reverse mortgage if your house is in a living trust.
Author
Raymond Hickman is a distinguished lawyer, writer, and legal commentator with extensive experience in various areas of law. He is widely recognized for his exceptional legal knowledge, insightful analysis, and engaging writing style, which have earned him a reputation as a leading voice in the legal profession.With his exceptional legal expertise, insightful analysis, and engaging writing style, Mr. Hickman has earned a reputation as a leading authority in the legal profession. His contributions to the field of law have been recognized by his peers, clients, and the wider legal community, making him a valuable resource for anyone seeking legal advice or insight.