A living trust may be an effective estate planning tool for those who don’t want their assets to go through probate. However, there are many assets that don’t go through probate and can be automatically be transferred to heirs. For instance, pensions, IRAs and bank accounts may come with the ability to name a beneficiary. Generally, a living trust is ideal for those who have property in multiple states or an estate that is otherwise complex.
When a living trust is created, the person who creates it is generally named as the trustee. This means that he or she has control over the assets placed inside of it. It is also a good idea to create a will as assets outside of the trust are still distributed according to state law unless a will exists.
It is critical that property put into the trust is titled in the name of that trust. For instance, a house that may be in an individual’s name should list the trust on the deed to ensure the trust is not rendered useless. A trust will cost about $1,200 for individuals and $2,500 for married couples on average. However, costs may differ based on an individual’s needs and circumstances. Those who have a living trust are urged to review it no more than every five years.
Living trusts may be ideal for those looking to avoid probate. Probate may create an opportunity for legal challenges, which may create a situation where assets are not distributed in a timely manner. In some cases, they may not be distributed to the intended beneficiary. These challenges may impact an individual’s legacy and increase the odds of infighting within a family. An attorney may assist in creating or reviewing trust documents.