Do I need a living trust?
Please remember that this answer is provided in the spirit of public education, not as legal advice. If you require legal advice for a particular situation, you should consult an attorney. Probate laws differ from state to state. The following discussion applies to residents of Texas. You may have seen an advertisement in the newspaper, or perhaps you attended a financial planning seminar that described revocable inter vivos trusts, also known as living trusts. A living trust works like this: You execute a document, called a trust agreement, that creates the trust. The trust agreement names you as the trustee and the primary beneficiary of the trust. As beneficiary, you are entitled to distributions of trust assets whenever you want them. You then transfer your assets to the trust, so that when you die, you own nothing that is subject to the probate process. Some planners assert that everyone should have a living trust, while others believe that a will is all most people need. Before y
The big advantage to making a living trust is that property left through the trust doesnt have to detour through probate court before it reaches the people you want to inherit it. In a nutshell, probate is the court-supervised process of paying your debts and distributing your property to the people who inherit it. The average probate drags on for months before the inheritors get anything. And by that time, theres less for them to get: In many cases, about 5% of the property has been eaten up by lawyer and court fees. Still, not everyone has to worry about probate, and some people dont need a living trust at all.
A. You may want to consider a living trust as a way to avoid probate. If you don’t take steps to avoid probate, after your death your property will probably have to detour through probate court before it reaches the people you want to inherit it. In a nutshell, probate is the court-supervised process of paying your debts and distributing your property to the people who inherit it. For sizable estates, months can pass before full distribution is msde to inheritors. During the process, some of the property will be spent on lawyer, executor and court fees. The exact amount will depend on state law and local practices.
A. In some States, avoiding probate is an important estate planning goal because of the onerous process involved. In Pennsylvania, the probate process is not onerous and we have found that the expense involved in establishing a living trust is in many cases not worth it. A living trust does not save any estate or inheritance tax.
You may want to consider a living trust as a way to avoid probate. If you don’t take steps to avoid probate, after your death your property will probably have to detour through probate court before it reaches the people you want to inherit it. In a nutshell, probate is the court-supervised process of paying your debts and distributing your property to the people who inherit it. For sizable estates, months can pass before full distribution is made to inheritors. During the process, some of the property will be spent on lawyer, executor and court fees. The exact amount will depend on state law and local practices.
