Avoid a Probate and Save Your Family from paying Costly Property Taxes

Ensuring the future of your family through the drafting of a Will or a Living Trust. The contents of a Will becomes effective upon your death. A Will basically allows you to name your heir/s to whom you wish to bequeath your property; it also lets you appoint an executor or personal representative, whose tasks shall include: the collection and management of all your assets; selling of your real estate or securities, if necessary; payment of your remaining debts; and, the distribution of what remains from your assets (after all debts have been paid) to all your named heirs. While still alive, you as the testator or the person who made the Will, can make changes to it as often as deem necessary. To be able to execute it, it will first need to be filed in the local probate court (in the state where you reside or where the estate you own is situated) and then subjected to probate, the legal process that will prove the validity of your Will.

A Living Trust or an “inter vivos” trust, on the other hand, is a written form of agreement, which specifies the transfer of your properties to a Living Trust. It requires a trustee, a role which you, yourself, can assume; the law, however, also allows a trust company or a bank to assume this role.

A Living Trust manages all transferred properties for the benefit of your heirs named in the trust agreement. You can revoke or amend it, just as you would a Will, any time before your death. But, while a Will may be executed only upon your death, a Living Trust takes effect as soon as you create, and transfer your properties into, it. Its length of effectivity is considerably flexible too since you can specify when exactly you want it to end, like when the beneficiary turns 23 or two years after your death, and so forth.

There are definitely many things that you may want to consider before deciding whether you should prepare a Will or a Living Trust, though. For while Living Trust offers the huge benefit of it being exempt from the probate process, it is still not outrightly recommended to everyone.

There are two types of living trusts recognized by the U.S. government:

  • Revocable Living Trust is wherein the grantor retains control of his/her assets that have been transferred to the ownership of the trust (since he/she is also the named trustee). As the name suggests, this type of trust may be revoked or changed by the grantor anytime he/she wishes to. Upon the grantor’s death, his/her successor trustee takes charge in the distribution of the properties identified in the document; and,
  • Irrevocable Living Trust is the type of trust wherein properties are irrevocably and permanently given to beneficiaries even while the grantor is still alive. This rendering these same properties free from the grantor’s interest and control. Extremely wealthy couples (or single parents), who have enough savings to last through a lifetime, are usually the ones opting to create this type of trust. Though they may lose actual ownership of certain properties, these will also be removed from their total estate, thus a smaller estate tax to pay.

Some major advantage of a Living Trust over a Will is that the former avoids probate, saving a family from paying costly property taxes (despite its being more expensive to prepare compared to a Will), automatically names someone who will manage the grantor’s affairs, and maintains privacy, as the distribution of properties will neither be publicly made nor recorded.

According to Tucson business law attorneys, drafting a Living Trust “isn’t always easy to do on your own, but with the help of a qualified legal professional, you can create a well-crafted, comprehensive plan for your future. Furthermore, they can help ensure your rights and interests are protected when dealing with estate matters, such as trust litigation or guardianships.”