Is a living trust a need or a want?
One of the first questions clients often ask me is: “Do I need a living trust?” The answer is pretty simple if you want to make things go as smoothly as possible for your loved ones in the event of your disability or death. A living trust is a substitute for a Will. It is an Agreement that provides instructions for the management of your assets during life and upon death. Initially, you are the trustee and have total control. You can amend it, revoke it, put property into it, take property out of it. Your control during life and while you are able is unlimited. In fact, it is an extension of you for income tax purposes.
It is upon disability or death that the real value comes into play. Probate is avoided because you have already provided instructions and the law governing trusts and fiduciaries applies. There need not be active supervision by any court. Upon your death, the assets owned by your trust instantly become vested in your successor trustee (usually, your spouse or child or children). The successor trustee, without court supervision, has the duty to carry out your wishes.
There is quite a bit involved in implementing a successful and seamless plan with trusts. All assets including life insurance and retirement benefits need to be looked at closely to make sure they work with your trust. So when clients ask me if they need a living trust, I often say no but if you understand the dynamics of how it can simplify the administrative burden, cost and delay that Will alone planning can create, you will probably want one.
Mark F. Winn
Attorney at Law, PLLC