There are times when a simple will is not enough. A revocable living trust provides flexibility, privacy, and can be created to achieve your unique planning goals. A living trust also allows your heirs to avoid the hassles of probate and to distribute your assets quickly.
You may wish to avoid probate because:
- your assets would be reduced by two to twelve percent
- it could take a year to pass your assets to your heirs
- your personal financial information would be made public
Probate* is the legal process that changes asset ownership from your name to your heirs using the courts. Unfortunately, if you have a will, your assets must still go through probate. To avoid probate costs, delays, and invasion of privacy, you may want to consider a revocable living trust.
A living trust provides for the use of assets in the trust during life. The trustee(s) make decisions about how the trust is utilized during life. At death, naming a charity in a trust for a dollar amount or a percentage amount will direct how the assets of the estate are to be distributed by the trustee(s), without having to go through probate. If you are led by the Lord to make a gift to this ministry beyond your lifetime, you may want to consider a revocable living trust instead.
A trust provides protection if you become physically or mentally incapacitated. You do not have to worry about the court taking control of your assets during life, the trust document and your co-trustee can manage those assets on your behalf.
In the case of a will, the courts will get involved during incapacity. If you can’t conduct business due to mental or physical incapacity (for example: dementia, stroke, heart attack), only a court appointee can sign for you—even if you have a will.
Once the court gets involved, it usually stays involved until you recover or die, and it, not your family, will control how your assets are used to care for you.
This is why creating a living trust may be more beneficial for you and your family. Here are some benefits:
- Avoids probate at death, including multiple probates if you own property in other states
- Prevents court control of assets at incapacity
- Brings all your assets together under one plan
- Provides maximum privacy
- Assets can remain in trust until you want beneficiaries to inherit
- Can reduce or eliminate estate taxes
- Can be changed or cancelled at any time
- Difficult to contest against your wishes
- Prevents court control of minors’ inheritances
- Can protect dependents with special needs
- Having peace of mind
*Probate is the legal process through which the court sees that, when you die, your debts are paid, and your assets are distributed according to your will. If you don’t have a valid will, your assets are distributed according to state law. Probate can be expensive—legal fees, executor fees, court costs and other fees must be paid before your assets can be fully distributed to heirs. If property is owned in other states, your family could encounter multiple probates, each according to the laws of that state.