When it comes to creating your estate plan, one of your primary motivations will likely be to ensure that your estate assets are distributed pursuant to your wishes when you are gone. While a Last Will and Testament can certainly accomplish that goal, you may wish to consider using a Living Trust instead. To help you decide, a Tucson trust attorney at Morris Hall PLLC discusses why you might want to use a living trust to distribute your estate.
Trust Basics
A trust is a legal relationship where property is held by one party for the benefit of another party. The person who creates a trust is referred to as the “Settlor”, “Trustor” or “Grantor.” The Settlor transfers property to a Trustee, appointed by the Settlor. The Trustee holds that property for the trust’s beneficiaries, also named by the Settlor. The overall job of a Trustee is to protect and invest trust assets and to administer the trust terms found in the trust agreement.
Why Should I Use a Living Trust to Distribute My Estate?
While both a Will and a living trust can be used effectively to distribute your estate assets, many people choose to rely primarily on a living trust at some point. There are several reasons why a living trust is often the preferred estate planning tool to distribute assets, including:
- A living trust helps your estate avoid probate. Getting an estate through the probate process can be time-consuming and costly. If you use a Will to distribute your estate, the assets gifted in your Will cannot be distributed to the intended beneficiaries until the end of the probate process. This often means your loved ones must wait months, even years, to receive their inheritance. In the meantime, the costs associated with probating your estate will reduce the final value of the assets passed down to your loved ones. Trust assets, on the other hand, bypass the probate process entirely because a trust does not have to be submitted for probate. Consequently, assets earmarked for your loved ones can reach them faster.
- A living trust allows you to maintain some control over the assets you gift. When you make a gift through your Will, those assets become the unconditional property of the beneficiary once the transfer of ownership is complete. When you use a living trust, however, to distribute assets you can also use the provisions of the trust to maintain a certain degree of control over the assets you gift. For example, you could require the beneficiary to use the assets to pay tuition. Moreover, because the Trustee of the trust manages the trust assets and administers the trust, you have someone to make sure the trust terms are honored.
- A living trust can protect the inheritance of a minor child. Being a parent to a minor child is a major incentive for using a living trust to distribute your estate because a minor child cannot inherit directly from your estate. As such, any assets gifted to a minor child in your Will must be held and managed by an adult until your child reaches the age of majority. Therefore, a trust is a better option to guard your child’s inheritance because it is set up with a Trustee whose job is to do just that – manage trust assets. A primary difference between using a Will and using a living trust is that you choose your Trustee whereas a judge may end up choosing someone to manage assets gifted to your child in your Will.
Contact Our Tucson Trust Attorneys
For more information, please join us for an upcoming FREE seminar. If you have additional questions or concerns about using a living trust to distribute your estate, contact our experienced Tucson trust attorneys at Morris Hall PLLC by calling 520-320-5100 to schedule your appointment today.
This blog should be used for informational purposes only. It does not create an attorney-client relationship with any reader and should not be construed as legal advice. If you need legal advice, please contact an attorney in your community who can assess the specifics of your situation.
- Beyond Probate: Understanding the Drawbacks & Alternatives - September 1, 2023
- DIY Estate Planning: Worth the Risk? - August 31, 2023
- Use These Questions to Develop an Estate Plan Outline - August 30, 2023
Leave a Reply