Why a Living Trust is SO Important
People just like you and me purchase homes every day. For many people, it is the biggest purchase of their life. It is their single largest asset and yet they don’t take measures to protect it for their family in the event of their death. Having a will is a good start for your estate planning but it’s not enough on its own. Why? Because a will does not avoid probate when you die. What is probate? Probate is a legal process that the court controls to make sure your debts are paid and your assets distributed propertly. Probate is expensive and typically takes from 9 months to 2 years to complete. Nothing can be sold or distributed without court approval so family members can even be denied a living allowance. Probate is also a public process so any “interested party” can see what is owned, what is owed and who will receive your assets.
The simple and proven alternative to a will is the revocable living trust. It avoids probate and lets you keep control of your assets while you are living – even if you become incapacitated – and after you die. It contains your instructions for what you want to happen with your assets. One of the benefits of a living trust is that all of your assets are brought together under one plan that you control. This way, you and your designated successor trustee, not the courts, can control everything.
If you have children, you’ll want to have a trust set up to provide for guardianship and education. You’ll want these affairs to be handled asap so that your children will not have to wait for the courts to interpret your will.
Any real estate that you own should be put into the trust as well to protect from probate and estate settlement costs which are often estimated at 3-8% of the estate’s value. It can also reduce or eliminate estate taxes. The cost of setting up our trust was approximately $1500. We feel tremendous peace of mind for our daughter and family members knowing that this is handled properly. We are very happy with the company that we used to set ours up. The advisor came to our home and sat with us and asked us a series of questions and then came back a couple of weeks later with the trust document prepared. If you’d like to set up your own trust, we encourage you to do so and would be happy to provide you with the contact information.