You may be under the impression that a living trust is a “fancy” type of last will that does more or less the same thing. While both documents can be used to facilitate asset transfers, there are some major differences. Once you understand the facts, you may come to the conclusion that a living trust is actually more effective than a last will.
If you were to maintain direct personal possession of your property and direct its distribution through the terms of a will, the inheritors that are named in the will would receive their inheritances all at once. There would be no way to allow for limited, incremental distributions to protect someone who may be prone to overspending.
Plus, a will would be admitted to probate. This is the process of estate administration. Though it provides certain protections to interested parties, it is not always a positive for the inheritors who are named in the will.
Probate is a time-consuming process, and the heirs to the estate must wait it out. They cannot receive their inheritances until the estate is probated and closed by the court. This will typically take close to a year if the case is not overly complicated. More complex cases can take longer.
With a living trust, these limitations and drawbacks would not exist. The trustee that you name in the trust declaration would be able to distribute assets to the beneficiaries in a timely manner outside of probate.
Plus, you would be able to leave behind specific instructions that the trustee would be compelled to follow regarding the nature of the asset distributions. If you want to make sure that the beneficiaries have assets to draw from for the long haul, you could allow for limited distributions on a monthly basis. Perhaps you could give the trustee the discretion to distribute larger sums under certain circumstances.
You can also account for incapacity if you have a living trust. It would be possible to empower a disability trustee to handle the trust administration tasks in the event of your incapacitation. This is a significant benefit, because many elders do become unable to handle their own affairs at some point in time.
Learn More About Living Trusts
We have provided some basic information in this brief blog post, but if you would like to learn more about the value of revocable living trusts, we have a valuable resource that you can access through this website.
Our firm has prepared an in-depth special report on revocable living trusts. This report is free, so you can access your copy without taking any risks. To get your copy of the report, click this link and follow the simple instructions: Free Report on Revocable Living Trusts.