Advantages of a Living Trust

A living trust is a legal document that outlines how your affairs will be carried out in the event of your death or severe incapacitation. The document should be prepared by an attorney and should encompass a broad range of issues. Before you set up a will to take care of your affairs after you pass on, learn the advantages of a living trust and why many feel they are the better choice when it comes to distributing your assets.

A living trust will contain information on all of your major assets, such as your home, cars, savings, retirement accounts, investment portfolios and so forth. You will legally organize these assets into a living trust, then you are appointed as the trustee. Be aware that you'll make arrangements for alternate trustees to manage your trust in the event of your death or incapacitation. While you are living, you can add assets to the trust and make adjustments to the list of alternate trustees through your attorney.

The biggest advantage of a living trust rather than a will is because of what happens after you die and the legal proceedings begin on dispersing your estate as you outlined. When there is only a will involved, an estate must be reviewed by the courts in a process known as probate. The courts will examine the will and give the beneficiaries an opportunity to contest it if they desire. If the will is contested, the legal process could drag on for months. Even if there is no disagreement on how the estate is dispersed, it can take the court anywhere from 4 to 6 months to release the assets. Besides, probate is expensive between court and attorney fees.

Living trusts are simple and smooth, transferring responsibility of the assets to a trustee in the event of death or incapacitation. As long as nobody contests the administration of the living trust, the assets of the estate can be disbursed within a few weeks after you die. Because assets are merely transferred to others in a living trust, there is much less legal red tape to endure. Other advantages of living trusts are that fees are minimal and an attorney is generally not needed, as family members are often named as trustees instead. Finally, the trustee has access to the estate immediately through a living trust and doesn't have to wait for the court's schedule to get results.