Trusts

Fred: Many times clients express concern about the costs and delays of going through the probate process. One of the ways to avoid that is to establish what’s called a living trust during your lifetime. A living trust involves a document whereby you create a trust. The creator of the trust is both the trustee and the creator. That person puts substantially all of their assets into the name of the trust. Upon the death of that person, their property passes under the terms of the trust document, and those assets are not subject to probate and can be distributed to the beneficiaries in a relatively short period of time in accordance with the terms of the trust document. There is less time involved, and in some cases less expense in winding up the affairs of the trust as opposed to a probate estate. In the case of a probate estate, at every stage along the process you must get the approval of the court to do such things as making distributions, hiring outside consultations, and things of that sort. The revokable living trust is not a panacea. It does not accomplish all things and in some cases may actually be disadvantageous to a person. I personally feel that the probate process is more protective of beneficiaries, particularly in the case of minor beneficiaries such as young children. I think it’s an advantage to go through the probate process where there are young children who absolutely must be protected if both the mother and father are deceased.