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Why You Need a Living Trust

by | Jul 30, 2021 | Elder Law, Estate Planning, Trust |

Many times people come into our office and tell us that they’ve read that they need a Living Trust (also known as a Revocable Trust). Sometimes they heard it through a friend or in something they’ve read. However, they often don’t have a clear grasp of why they need one. There are at least four great reasons why a Living Trust is a great estate planning vehicle.

1. Probate Avoidance. By creating a Living Trust and transferring your assets into the Trust, your family can avoid having to probate those assets at the time of death. In Florida, probate is a court proceeding involving a judge and lawyers. Most people who have been through probate agree that it is not a good thing if you can avoid it. For example, if your house is in your sole name and you die, it will need to go through probate in order to be sold or distributed. If the house is held in a Trust, it avoids probate upon your death. The Trustee can deal with the house and not involve a court in the process. This can save significant time (often in excess of a year), aggravation, and expense (often as much 3% of the estate) involved in probating one’s estate.

2. Controlled Distribution. A Living Trust allows the party giving the gift to control the amount and frequency of the distributions. This way, rather than a beneficiary getting a distribution all at once, the distributions can be spread out in time and amount. This can be especially desirable if there are concerns about a beneficiary’s ability to handle an inheritance all at once. For beneficiaries who are under age 18, the Trust is a great way to avoid the monies being inherited from falling under a court guardianship. For beneficiaries who have substance abuse or mental health issues, the Trust is a great way to protect against the inheritance being used foolishly or for undesirable purposes (e.g. spent on drugs or alcohol).

3. Privacy. The administration of a Living Trust is not a public process. It is administered and distributed in private. Probate, on the other hand, is generally a public court proceeding. This means that beneficiaries of the probate estate can be determined by anyone. Probate can mean assets of the estate can be discovered by third persons. By having assets distributed through the Living Trust, no one other than the beneficiaries and the Trustee know the details of the distribution plan.

4. Care in the Event of Incapacity. If you become totally incapacitated, often a guardianship or conservatorship will have to be established. This involves a court declaring you to be incapacitated. The guardianship then falls under court oversight and can cause considerable expense. If you have a Living Trust and become incapacitated, your successor Trustee (along with the agent under your Power of Attorney) can take over your care without a public declaration of incapacity and without a court proceeding. This saves embarrassment, inconvenience and considerable expense.

If you are considering establishing a Trust, you will benefit by having an experienced estate planning attorney assist you. At Lins Law Group, P.A., we represent clients establish Living Trusts every day. We’d love to assist YOU!

 

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