Many people do not consider the possibility of creating a trust because they harbor misconceptions about the administration process. In this post, we will share five key facts that will help you understand the value and relative simplicity of living trusts.
You act as the trustee.
One of the most important things to understand about the living trust is the fact that you act as the trustee while you are living. You have complete control of the assets every step of the way, and you retain the power revocation, so you can dissolve the trust entirely if you choose to do so.
After the terms have been established, you can change them in any way that you see fit, and you can convey property into the trust after it has been established and funded.
You can name a disability trustee.
This is not a very pleasant subject to contemplate, but as elder law attorneys, we have to confront difficult situations that our clients may face. According to the Alzheimer’s Association, over 30 percent of people that are 85 years of age and older have contracted the disease.
When you have a living trust, you can designate a disability trustee. This person or professional fiduciary will step into the role if it ever becomes necessary.
You can change the successor trustee designation.
If you establish a living trust, you name a successor trustee to handle the administration tasks after you are gone. The disability trustee can act as the successor trustee, but this is not required.
After you have named the trustee in your living trust declaration, you can change the designation at any time. You can also add an alternate that would assume the duties if the primary designee becomes unable to take on the responsibility for some reason.
Asset consolidation streamlines the process.
When a living trust is used, the assets that comprise the estate will be under the same ownership umbrella. This streamlines the estate administration process, and it makes the trustee’s job easier.
Even if you have a living trust, you may still have some assets in your direct personal possession at the time of your passing. To account for this, you can include a pour-over will. This type of will facilitates the transfer of the assets into the trust so they can be distributed under those terms.
Probate is not a factor.
A key point to understand about a living trust is the fact that the distributions are not subject to probate. This is a court supervised legal process that will enter the picture if you use a will to arrange for asset transfers.
Probate will typically take at least eight months to run its course, and it can take considerably longer in some cases. There are a multitude of expenses, including a filing fee, the executor’s remuneration, legal fees, accounting charges, appraisal expenses, and liquidation costs.
Another negative is the loss of privacy. Probate records are available to anyone that wants to access them, and this information can potentially cause hard feelings among interested parties.
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If you have already decided that it is time to work with a Memphis, TN estate planning attorney to put a plan in place, we are here to help. You can send us a message to request a consultation appointment, and we can be reached by phone at 901-763-2500 or 866-997-6325.