One of the most common questions an estate planning lawyer receives is if it will be a good choice to draw up a living trust to avoid probate. Realistically it depends on your unique situation. Some people will need a trusts, others will not, and there are those that fall in between the two extremes. To help you understand whether or not a living trust is right for you, consider the following. Then you should consult an estate planning lawyer to discuss your personal situation.
I want to avoid probate, is a living trust right for me?
If you do not want your loved ones to have to go through the probate process after your death, you might consider a living trust. There are several ways a lawyer can help you to transfer your assets to beneficiaries without going through probate. These include:
- Holding your property in joint tenancy with the right of survivorship with your spouse, children, or other individual
- Making gifts before your death
- Including a pay on death designation to a bank account
- Naming a beneficiary on any insurance or retirement accounts
In addition to the above, a living trust can be used for any asset and is much more flexible than a will. You can also name alternative inheritors should a primary beneficiary pass away.
The Downsides to Living Trusts
Living trusts require more time than a will to set up. They also require ongoing maintenance, are difficult to modify, costly, and generally require the help of an estate planning lawyer. You will also need to have a living will in place, as a backup.
Are You a Candidate for a Living Trust?
For many people, the benefits of a living trust outweigh the drawbacks. This is especially true when:
- You have a large estate
- You are likely to die in the next 10 or 15 years
In general a living trust is not ideal for a middle income person, who is in good health, and under 55 years. A living will may be more practical and easier to manage. In the event of your untimely death, the will should be able to transfer all of your assets with relative ease. Furthermore, laws and rules are constantly changing. There is a good chance that over the next 10-20 years, various procedures will be established to make the probate process easier.
One of the biggest things to consider when trying to determine whether or not a living trust is right for you, is your wealth. In general, as an estate lawyer might explain to you, the wealthier you are, the more you can save by avoiding the probate process. If you have over $1 million in assets or own a small business, you may want to create a living trust regardless of your age.
Are You Married
If you are married and both you and your spouse intend to leave most of your assets to one another, avoiding probate shouldn’t be a major concern. If you believe you marriage is on the rocks or there are special cirucmstances to consider, you may want to talk with a lawyer.
To consult an estate planning lawyer for further advice, call [law firm name].