A living trust is a legal document that, just like a will, contains your instructions for what you want to happen to your assets when you die. But, unlike a will, a living trust avoids probate at death, can control all of your assets even after you are gone, and prevents the court from controlling your assets at incapacity.
Common misconceptions about Trusts
Does a Trust and a Will do the Same Thing?
Not quite. A will requires all of your assets to go into probate, to be distributed at the court’s order to the heirs you chose in the will. An estate will usually go through the probate process for an average of 2 years, where a trust can generally be administered and finalized in about 90 days. With a trust you already transferred your assets into the Living Trust during your life time, thus, there are no assets to go through probate.
Who should have a Living Trust?
Age, marital status and wealth don’t really matter. If you own titled assets and want your loved ones (spouse, children or parents) to avoid court interference at your death or incapacity, consider a living trust. You may also want to encourage other family members to have one so you won’t have to deal with the courts at the time of your loved ones incapacitation or death.
Does my Trust end when I die?
Unlike a will, a trust doesn’t have to die with you. Assets can stay in your trust, managed by the person or trustee you have chosen until your beneficiaries (including minor children) reach the age(s) you want them to inherit, or to provide for a loved one with special needs.
A Living Trust Amendment is a legal document that changes specific provisions of a Revocable Living Trust but leaves all of the other provisions unchanged, and can be changed any way you desire, as often as you desire.
- If you are considering making a change to your Revocable Living Trust it must be signed with the same formalities as the original trust agreement.
- Unless authorized in the trust document, if you make handwritten changes to your Revocable Living Trust it will either void the trust or be ignored.
- Trusts should be amended when laws change or when your circumstances or desire change.
- A Trust or a Will should be reviewed at least every 5 years to make sure it is up to date with the law and your desires.