The Friendly Lawyer

What is a living trust?

It is a written legal document that partially substitutes for a will. With a living trust, your assets (your home, bank accounts and stocks, for example) are put into the trust, administered for your benefit during your lifetime, and then transferred to your beneficiaries when you die.

Most people name themselves as the trustee in charge of managing their trust's assets. This way, even though your assets have been put into the trust, you can remain in control of your assets during your lifetime. You can also name a successor trustee (a person or an institution) who will manage the trust's assets if you ever become unable or unwilling to do so yourself.

Do you need a living trust?

• A living trust avoids probate. If you want your estate to avoid the probate process, this is your best option. A simple will does not avoid probate.
• The greater the value of your assets (particularly if you own real estate), the greater the need for a living trust.
• A living trust helps minimize estate tax.

If you answer yes to any of the questions, then you should seriously consider establishing a trust.

1. Is your estate worth close to $1,000,000 or more?
2. Do you have a financial interest in a business?
3. Do you have beneficiaries under the age of 25?
4. Do you have children with special needs, meaning they will never be able to financially support themselves due to a physical or mental disability?
5. Are you in a second or third marriage?
6. Are you on bad terms with any of your heirs?
7. Are any family members physically ill?
8. Is any family member in need of creditor protection?
9. Do you own real estate of any value in more than one state?