A Living Trust is an arrangement in which you transfer legal title of your assets to the trust, to be managed for the benefit of the persons named in the trust document as beneficiaries. The person creating the trust is usually the trustee until he or she dies, or becomes unable to manage the trust due to poor health or disability. At that time, a Successor Trustee takes over management of the trust. If you have a Living Trust, you also still need a Will. The Will is necessary to distribute any assets on your death that you may not have transferred to the trust, and to name a guardian for minor children.

A Living Trust can avoid probate; allow a successor trustee to manage your assets if you become disabled, instead of someone appointed by the court; limit the share your spouse receives of your estate; and simplify distribution of property you own in more than one state. Information about assets in a living trust is also generally not available to the public.

In some instances, the advantages of a Living Trust may be accomplished by other means, such as a durable power of attorney, bank trust account, or joint ownership.

Under certain circumstances, probate may present certain advantages over a Living Trust. For example, a Personal Representative may ask the court for supervision where questions arise. It is also advantageous in limiting the time in which creditors or heirs can file claims against an estate or challenges to a will.

In regard to privacy, a Living Trust may not have significant advantages over probate under a Will. Independent probate administration may be used in most circumstances. This does not require the Personal Representative to file an inventory of the assets of the estate, nor any annual accounts, and as a result, information on the deceased’s assets are not made available to the public.

Category: Wills, Estates and Trusts
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