When you start to explore your options with regard to estate planning devices, you may come to the conclusion that a living trust is the ideal centerpiece. There are a number of different benefits if you go this direction, and one of them is the avoidance of probate.
If you use a will to state your final wishes, the executor would admit the will to probate, and the court would determine its validity. Going forward, the executor would handle the estate administration tasks under the supervision of the probate court.
There are several drawbacks that go along with the probate process, and one of them is the cost factor. There is are court filing fees, and there are legal fees and accounting expenses. The executor gets paid, and appraisals and liquidations can cost money.
All in all, a noticeable percentage of the estate can be consumed during this process. Another negative is the consumption of time. It will often take close to a year for probate to run its course if there are no snags, and inheritances cannot be distributed until the court is ready to close the estate.
As we touched upon, the will has to be “proved” during probate so anyone that wants to present a challenge can come forward. This is a necessary safeguard because there are legitimate cases of invalid wills, but in all too many instances disgruntled individuals present scurrilous challenges.
Another drawback is the loss of privacy. Since probate is a public proceeding, anyone who has an interest in the way that you distributed the assets could access the records to get all the details.
These less than ideal circumstances vanish when you use a living trust. Assets in the trust can be distributed after the passing of the grantor or trust creator free of the probate process.
No Loss of Control
Some people assume that you lose all control of assets as soon as you convey them into a trust, but this is not the case with a revocable living trust. In fact, you can dissolve a revocable trust at any time. If you revoke the trust, it would no longer exist, and you would once again take direct personal possession of the property you conveyed into it.
The point of the trust is to serve as an estate planning tool so it is unlikely that you would ever want to rescind it, but you would maintain control while it is intact and could amend it as needed. You could act as the trustee throughout your life, and you could also be the initial beneficiary of the trust.
As you can see, you call the shots every step of the way. You can add or remove property from the trust at any point, and you can change the terms.
Now that we have provided some basic background information, we can get to the point of this post. In the trust declaration, you name a successor trustee to assume the administrative duties after you pass away, and your heirs would be the successor beneficiaries.
Any adult who is of sound mind that is willing to accept the role can legally act as a trustee. However, you have to ask yourself if you know anyone who is qualified. There is also the matter of longevity, and there could be conflicts of interest.
As an alternative, you could engage a professional fiduciary such as a trust company or the trust department of a bank. Though there are costs involved, it can be the right course of action under certain circumstances.
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Now is the time for action if you have been going through life without an estate plan during these uncertain times.
We would be glad to gain an understanding of your objectives and provide the appropriate recommendations. If you decide to move forward, we will help you construct a custom crafted estate plan that is ideal for you and your family.
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