What Is a Living Trust in Real Estate? A living trust is a legal document that makes it easier for you to pass along property, accounts and other assets to your loved ones after you die. It allows your assets to pass along directly to your designated beneficiaries without needing to go through the courts, eliminating the costly and lengthy probate process.
Even though the living trust holds these assets, you are still considered in possession of them while you’re alive (assuming that you named yourself the trustee). This means that you can move assets in and out of the trust as you see fit, and if you have a revocable trust, you can even cancel or change it at any time.
A living trust is a beneficial financial product for many reasons.- bypass probate court, you remain control after death, and remains private.
How a Living Trust Differs from a Will - living trust is considered “in effect” even while the grantor is still alive. A will, however, only goes into effect after the grantor passes away.
- A will goes through the probate courts, while a living trust skips the probate process altogether.
- During probate, your will is filed as public record. Your living trust and its contents, however, can be kept entirely private.
- Any assets without a named beneficiary (such as a life insurance policy) will pass through probate, even if you have a will. This process can take months or years, while your loved ones wait to receive their share of your estate. With a living trust, however, assets can be passed down immediately.
- Creating a will can be a cheap – or even free – process. Establishing a trust, however, is a bit more complex and can cost hundreds or even thousands of dollars.
- You can make requests and name stipulations in your will. However, your heirs don’t necessarily have to follow them after you’re gone (depending on the conditions and even your state). With a trust, you can dictate how and when assets are disbursed. You’ll also have a trustee around to manage the process.
Making a Living Trust: Can You Do It Yourself?
