[vc_row][vc_column width=”1/1″ animation=”none” column_padding=”no-extra-padding” background_color_opacity=”1″ font_color=”#383838″][vc_text_separator title=”What They Are” title_align=”separator_align_left”][vc_column_text]A living trust is one established during your lifetime, as opposed to one established pursuant to a Last Will and Testament at the time of your death. A living trust can be revocable (one that can be changed or amended) or irrevocable (one that cannot be changed), such as an irrevocable life insurance trust. The general term usually refers to a revocable trust.[/vc_column_text][divider line_type=”No Line” custom_height=”50″][vc_text_separator title=”Last Will and Testament vs. Living Trust” title_align=”separator_align_left”][vc_column_text]In most cases, a living trust is not a replacement for a Last Will and Testament. Wills that are used in conjunction with a living trust are often referred to as “pour over” wills because, at the time of your death, assets covered in a Last Will and Testament will “pour over” into your living trust.
Even if a living trust is fully funded with assets owned during your lifetime, there still may be assets in your estate that are subject to your will, such as:
- A tax refund made payable to you or your estate after your death.
- If your death came as a result of someone else’s negligence, claims that your estate may have against the negligent individual may create payments to your estate.
- You simply forgot something, like gold coins in your lock box.
[/vc_column_text][divider line_type=”No Line” custom_height=”50″][vc_text_separator title=”Avoid Probate with a Living Trust” title_align=”separator_align_left”][vc_column_text]When you die, the assets owned by you individually or titled in your name become subject to the jurisdiction of the local probate court where you died. If those assets are not in your name at death but instead are titled in the name of your living trust, such assets are not “probate assets.”[/vc_column_text][divider line_type=”No Line” custom_height=”50″][vc_text_separator title=”Benefits of a Living Trust” title_align=”separator_align_left”][vc_column_text]Avoid probate on out-of-state property: Real estate is the only asset you can own in another state that pulls you into that particular state’s probate process. That often means you will need to hire an attorney in that state, which adds time, complexity and cost to the settlement of your estate. All of that can be avoided if your out-of-state property is held (titled) in your living trust. Simply execute a deed that transfers the property from your name, or yours and your spouse’s names, to the trust. The deed is then filed in the same manner as if you were selling your property to a third party. In most states, the transfer is exempt for tax purposes.
Protect privacy: In a small community, the public record aspect of the probate process can quickly become the talk of the town. If you are a very wealthy individual or a well-known public figure, the privacy aspect of a living trust may be significant even if you live in a larger city.
Avoid banking interruptions: If you have your bank accounts in your living trust, your death will not trigger a need for closing those accounts. Hence, your automatic payments and everything else relating to your banking will continue to operate seamlessly for the benefit of your surviving spouse or family members.[/vc_column_text][divider line_type=”No Line” custom_height=”50″][vc_column_text]Excerpt from End of Lawyers: Thank Goodness by Jamie Hargrove, CEO NetLaw[/vc_column_text][/vc_column][/vc_row]