Why do people create living trusts?
Living trusts are designed to avoid probate proceedings. Probate simply refers to the court-administered process of paying debts and distributing property to heirs upon one’s death. This is a very timely and costly process. Heirs can often expect to wait months before receiving anything, and by the time they do, the assets have been diminished significantly by court costs and attorney’s fees. Other common reasons to create a living trust include reducing taxes, ensuring financial privacy, and regulating the use of assets (in case the owner becomes incapacitated).
