We all have seen articles and advertisements in newspapers inviting the public to seminars to discuss something called a “Living Trust”. Often the article or the advertisement suggests that a Living Trust is an essential requirement of any estate plan. Although that sometimes is the case, it is not always the case.
Is a Living Trust right for me and my family? As with many legal questions the answer is an annoying “it depends.” It depends on your goals, your objectives, and the dynamics of your family. Here are 4 factors to consider when assessing whether a Living Trust is right for you.
Avoiding Probate. For many people “avoiding Probate” is important. Although administering an estate through the Probate Court usually moves smoothly when handled by someone who knows what to do, many people don’t want their family to have to deal with a Probate Court process.
So, if one of your goals is “avoiding the Probate Court” a Living Trust can help you accomplish that goal. Anything you put into the Living Trust while you are alive (called “funding” the Trust), can be controlled, administered, and transferred by your successor Trustee, after your death, without needing any help from the Probate Court to make that happen. Although your family still will need to file a Connecticut Estate Tax Return with the Probate Court (mandatory for any deaths occurring after January 1, 2005), they will not need help from the Probate Court to get control of the assets that are already in the Living Trust.
Privacy. Another reason people sometimes like a Living Trust is that it is not part of the public record on file with the Probate Court. This means that no nosy neighbor can check to see what you may have put into the Living Trust. It also makes it harder for a disgruntled family member to contest what you have done.
Incapacity Planning. Some people like the fact that the Living Trust provides more detailed restrictions and offers greater guidance for how to manage assets in the event of incapacity, as opposed to using a Durable Power of Attorney Instrument.
Avoiding “Ancillary Probate.” If you are a resident of Connecticut and own real property in another state, a Living Trust can be a useful tool for planning to avoid the time and expense associated with “ancillary” probate in another State.
As you can see, there is a lot to be said for the idea of using a properly funded Living Trust as one of your estate planning documents. However, sometimes what you want to accomplish, can be accomplished through easier, more cost-effective mechanisms. So, is a Living Trust right for you and your family? A knowledgeable advisor with information about you, your family, and your goals can help you determine what works best for you and your family.
If you are currently considering a Living Trust, and want more information to help you make an informed decision, feel free to call or email us at firstname.lastname@example.org. We will send you a complimentary copy of our “7 Myths and Truths About Living Trusts.” We also would be happy to meet with you to help you make an informed decision. There is no charge for the initial meeting.