There are at least six really good reasons for you to have a living trust in your estate planning package.
Not everyone needs one, and they have sometimes been oversold by putting unrealistic fear of probate in the minds of consumers. A living trust can be a very useful estate planning tool, however. Estate tax savings are only one reason to consider a living trust, and since changes in estate tax laws, that concern probably only applies to multimillionaires. Here are some other benefits from setting up a living trust, regardless of the size of your estate:
1. Gathering Together and Organizing Your Assets
The living trust helps you get your assets organized and under one “manager” as trustee (probably yourself initially) or successor trustee during your lifetime, and then passes them on to a successor trustee after you die. If you become incompetent or incapacitated during your life, having the assets in the trust, with a good trustee named to succeed you, may be even better than using a power of attorney to facilitate someone you trust taking over managing your affairs. That person can then easily carry on with accomplishing your trust purposes when you die. Having all the assets gathered into the trust makes it so much easier for those left behind to distribute your property on your death rather than having to try to hunt everything down.
2. Easier Passage of Title to Assets on Death
Your assets will go directly to the beneficiaries you specify as quickly as your trustee is able to implement the terms of the trust — bypassing what can sometimes be a long and costly expensive probate. However, whether this is worth the expense in your particular situation should be discussed with a good probate attorney. Probate does not always have to be scary, long, and expensive. Also, there still will be some steps required to reflect a successor trustee taking over or transferring assets out of the trust to beneficiaries, if applicable, after your death, so it is not totally expense free. In many instances, however, the trust greatly facilitates passage of title, especially for oil and gas interests.
3. Privacy Concerns
A trust can keep details about your estate, its value, and how you have chosen to distribute your estate private, although Texas probate law no longer always requires that an inventory and appraisement of your estate be filed with the probate court, thereby making what you own and what it is worth public record. With a living trust, your death, the terms of your estate plan for how your assets will pass, and what you own and what it is worth does not have to be made public record at all and can remain private.
4. Avoiding Ancillary Probates in Other States
The living trust allows you to transfer property owned in different states through the trust without having to do “ancillary probates” or similar proceedings in all the various states where you own property to accomplish this. The savings in this respect alone can pay for the slightly higher cost of preparing a living trust over that for a will alone. Delay in transfer of title is greatly shortened as well.
5. Ability to Set Confidential Conditions on Disbursements to Beneficiaries
The trust lets you set conditions on beneficiaries about when and how your assets will pass to them which can remain confidential. For instance, children or grandchildren can be required to be in enrolled in higher education, maintain a certain number of hours and a certain GPA, remain drug-free, and such conditions, before they receive distributions from the trust. The trustee can be given discretion about when and how much to dole out to a beneficiary based on any number of factors.
6. Protection of Assets
“Spendthrift” provisions in the trust also can protect the assets from creditors (or overreaching family members) of a beneficiary until they are actually distributed. Many families prefer not to publicly share such details of their concerns for a beneficiary’s right to receive inheritance.
At Adair M. Buckner, Attorney at Law, we would welcome an opportunity to talk with you about whether you should include a living trust in your estate planning program. Contact us today to schedule a complimentary consultation.
At Adair M. Buckner, Attorney at Law, we would welcome an opportunity to talk with you about whether you should include a living trust in your estate planning program. Contact us today to schedule a complimentary consultation*.
*(The free consultation does not cover actual review of documents or giving legal advice on a specific situation.)