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Living trusts are just one tool in effective estate planning

In the field of estate planning, many tools are available to help Texas residents direct how they want their assets distributed after their deaths. Living trusts have become increasingly popular in the past few years, as they allow assets to be transferred to beneficiaries without having to go through a court probate process. However, some experts say that a living trust is not always the best choice.

 

Most people are aware that when a person becomes deceased, their will directs how their estate is to be disposed of. An executor, the person responsible to carry out the wishes of the deceased,  is specified in the will or can be appointed by the court if none is previously selected. The court then reviews the will's contents, ensures that all legal requirements for notification of creditors is met, and oversees all other aspects of disbursing the assets of the estate. This probate process can often take a year or more.

In living trusts however, this probate process is avoided by placing whatever assets are desired into a trust. The primary trustee is often the deceased themselves, and a secondary or "successor trustee"  is named who will manage the assets of the trust if you are unable to do so. Assets that are made a part of the trust must have ownership documents or titles removed from the individuals name and be placed in the name of the trust. Any assets that remain in the name of the decedent will not be considered a part of the trust. This can often be a complicated process.

 

There are other requirements of living trusts that need to be met and thorough research should be done if a person is considering this type of vehicle for their estate. They are also more expensive to have structured and according to some estate planners, are not beneficial for those whose estate assets total less than $100,000. In these cases, standard wills may be the best choice. Knowing the benefits and drawbacks of living trusts can help Texas residents who want to simplify their estate planning make the right choice for their particular financial circumstances.

 

Source: thecommunityvoice.com,"A living trust can simplify estate planning," Ken Weise, June 14, 2013

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