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Why Consider a Living Trust Even If You Have a Will?
The Limits of a Will
A will only goes into effect after you die and must be verified by the Probate Court before it can be enforced. It does not avoid probate, and offers no protection if you become incapacitated. The court could take control of your assets before you die, leaving your family vulnerable.
What Is Probate and Why Is It a Problem?
Probate is the court-supervised process of validating your will and distributing your assets. Drawbacks include:
- Expense: Legal and executor fees can be 3–8% of your estate’s value. If you own property in multiple states, your family may face multiple probates.
- Time: Probate can take 9 months to 2 years, with assets often frozen during this period.
- Lack of Privacy: Probate is public—anyone can see what you owned and owed.
- Loss of Control: The court determines distribution, not your family.
Joint Ownership and Probate
Joint ownership usually only postpones probate. If both owners die at the same time, or after adding a new joint owner, probate is still required. Adding co-owners can create legal, tax, and control issues.
Incapacity and Court Involvement
If you become incapacitated, only a court appointee can manage your financial affairs—even if you have a will. The court may stay involved until you recover or pass away, which can be costly and public.
Does a Durable Power of Attorney Solve This?
A Durable Power of Attorney lets you name someone to manage your finances if you’re unable, but some institutions may not honor it unless it’s on their form. It’s most effective when used alongside a Living Trust.
What Is a Living Trust?
A Living Trust is a legal document that provides instructions for your assets during your life (including incapacity) and after your death. Unlike a will, it avoids probate and keeps your affairs private.
How Does a Living Trust Work?
- You transfer ownership of your assets to your trust, which you control as trustee.
- You retain full control—buy, sell, amend, or revoke the trust at any time.
- At incapacity or death, your chosen successor trustee manages or distributes assets according to your instructions, without court involvement.
Common Questions
- Do I lose control? You keep full control as trustee and can amend or revoke the trust at any time.
- Is it hard to transfer assets? Your advisors can help retitle assets. Most assets, including real estate, bank accounts, and personal property, can be included.
- Does it take a lot of time? It takes some preparation, but protects all assets transferred into the trust.
Comparison: No Will vs. Will vs. Living Trust
| Aspect | With No Will | With a Will | With a Living Trust |
|---|---|---|---|
| At Incapacity | Court Control: Appointee oversees care and finances | Same as no will | No Court Control: Successor trustee manages affairs |
| At Death | Probate: Court distributes assets | Probate: Assets distributed per will | No Probate: Assets distributed by successor trustee |
| Costs & Fees | 3–8% of estate value | Same as no will, can increase if contested | Minimal or none if no estate taxes; attorney may be needed for large estates |
| Time | 9 months–2 years at death, court involved at incapacity | Same as no will | Usually weeks at death, no delays at incapacity |
| Flexibility & Control | None: Court controls assets | Limited: Assets distributed per will, can change will | Maximum: You can change/discontinue trust at any time |
| Privacy | None: Public record | None: Public record | Maximum: Trusts are private |
