Living trusts are a mechanism for transferring property following death and have become very popular methods for estate planning. The ownership of titled property (home, etc.) and personal property is transferred to a "trust" which is controlled by you as the designated "trustee". A living trust also appoints a "successor trustee" who can manage the trust immediately if needed. Living trusts are revocable, meaning they can be modified which also allows you to essentially maintain ownership of all property transferred into the trust.
Some of the main benefits of living trusts are noted below:
- Avoids probate - the assets transferred to the trust do not pass through probate thereby avoiding legal and executor fees. Instead, they pass straight through to the beneficiaries.
- May reduce or eliminate estate taxes.
- Avoids conservatorship - if you become incapacitated the successor trustee will immediately take over management of the trust financial affairs which avoids probate.
- Allows for immediate use of your assets to care for minor children (since the probate is avoided) and grants you control when inheritance is distributed to children.
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