Why You Should Consider a Living Trust

You have two primary choices to protect your estate.

The most common is a will, which takes effect when you die.

The other option is for you to establish a living trust. This works differently from a will and, in many cases, may be a better way to protect your assets and your legacy.

What is a Living Trust?

Unlike a will, a living trust (also known as a revocable trust) is in force while you are still alive.

Here’s how a living trust works:

  1. Decide if this will be an individual trust or shared trust (such as you and your spouse)
  2. Choose the assets or property you want to include in the trust
  3. Choose the trustee (usually you) plus a successor trustee who will administer the trust if you die or become incapacitated
  4. Have a qualified attorney prepare the documents (don’t do this on your own!)
  5. Sign the documents in front of a notary public

You’ll also need to change the ownership for everything that has a title (such as mortgages or cars) to show that you own them as a trustee.

Once the trust is in operation, you can change it at any time as long as you are alive and mentally competent. This is why these are often called “revocable” trusts.

Why You Might Need a Living Trust

So, why should you consider setting up a living trust? There are several reasons:

  • Avoid Probate

    In Texas, like most states, a will has to go through a court process called “probate”. This is where the court reviews the will and distributes the assets accordingly.Probate is usually a straightforward process…at least if you have an updated will. But it can take months or even years before your beneficiaries get paid. Probate can also require additional court costs and attorney’s fees.

    A living trust doesn’t require probate. This mostly avoids the courts and lets your beneficiaries receive their share of your estate faster and with minimal additional legal costs.

  • Protect Yourself If You Become Incapacitated

    A will protects your family and your legacy when you die. But what if you become mentally or physically incapacitated?It can take months…or longer…for the courts to name someone who can act in your best interests. And it may not be the person you want.

    With a living trust, you’ve already picked someone to be your successor as trustee. Once you can’t manage your affairs, they step in and handle things for you according to the terms of the trust.

  • Provide Direction For Your Minor Children

    Let’s be honest. Most 18-year-olds aren’t ready to make complex financial decisions without guidance.But if all you have is a will…or nothing…that’s exactly what happens when you die. The courts will appoint a trustee to manage your assets until your children turn 18 and are legal adults.

    A living trust lets you control how and when your assets are distributed. You can delay distribution until your children reach a specified age or restrict it to specific uses like buying a house or attending college.

    Your estate is a legacy to your family…you have the right to see that the assets are used well.

  • Keep Things Private

    When your will goes through probate, it becomes a public document. That means anyone can have access to it.Do you want the public to know who inherited what from you? Especially with all of the scam artists around these days?  Probably not.

    A trust, however, remains private unless you choose to make any details public. It stays “in the family”.

Do You Still Need a Will?

Yes, you do. A will does several things that a trust can’t do.

For example:

  • If you forget to include any assets in your living trust, you need a will to direct where those assets will go when you die…otherwise, the courts will decide based on state law (not your preferences)
  • You can leave property to your dependent children in a trust, but you need to name a guardian for them in your will. Again, if you don’t do this then the courts will do it.

Do you have any questions about living trusts or wills?

Feel free to contact me either through my website (https://mmconnollylaw.com), email (mmconnollylaw@gmail.com), or via my Facebook or LinkedIn pages.

Remember: we can’t predict your future, but we can help you protect your legacy.

Margie Connolly