There have been many discussions on the topic of whether a living trust or a will is the better solution. In truth, the debate is so controversial because it is a matter of personal choices because everyone’s situation is unique. Creating living trust is the right answer if these statements are true for you:
1. You want to avoid probate process
This is the most popular reason for which people choose a living trust over a will. Probates are often costly and can take years to complete. With a living trust, your heirs will be able to inherit your assets quicker and with less legal fees.
2. You want someone else to manage the assets in case you became mentally incapable
After creating living trust, you can appoint a successor trustee. This person can then take over and manage your affairs for you when you can no longer do so. A living trust is quite similar to power of attorney, but gets accepted much more easily by banks and title companies.
3. You own properties in more than one state
The probate process can be costly in some states, and even more so when you have assets in different states. The reason is that probate will have to be done in each state, and it will be much more troublesome to repeat the process more than once. Plus for out of state probate, your family will need to spend even more time, money and effort to follow through with the process.
4. You want to prevent your wishes from being challenged
A will can be contested, while challenging a living trust is much more difficult. When the person is alive, the living can already be challenged, but the trustee will be there to defend the trust. It becomes even more difficult to challenge a living trust when it has been operated by the owners many years before they pass away. For this reason, if a person has a reason to believe his or her will might be contested later on, he or she will be creating living trust instead.
5. You wish to keep your assets a private matter
During the probate period, your will and the asset inventory will become a public record. Since creating living trust eliminates the probate process for assets held by the trust, these assets will remain confidential. Keep in mind that some of your assets are already a matter of public record, such as your car title, or your initial mortgage on the house. A living trust, however, can keep other assets such as stocks and bonds completely confidential.
6. You can stay on top of adding assets after creating living trust
A living trust only has effects on the assets that it holds. Therefore, in order to take full advantage of a living trust, you will need to make sure to transfer all your assets into a living trust. Whatever left outside of your trust can be subjected to probate, which defeats the purpose of creating a living trust.
Having a living trust could potentially save you and your family a costly, lengthy and complicated probate process. The most important thing is with proper planning now, you and your family will be able to avoid headaches and unnecessary costs in the future. To find out more information and set up a living trust, contact a living trust specialist at Heritage Living Trust.
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