What is a Living Trust?
A living trust, also known as a Revocable Living Trust or a Family Trust is a legal document that holds title or ownership to your real property and assets. When you create a Revocable Living Trust you transfer ownership of your assets to the trust. Transferring assets is typically called “funding.” When you transfer title you DO NOT relinquish any control. You can still buy, sell, borrow or transfer assets.
To many the living trust looks a lot like a will. It includes the details and instructions for how you want your estate to be handled at your death. However, unlike a will a properly funded trust:
– Does not go through probate.
– Prevents the courts from controlling your assets at incapacity.
– Gives you control over the assets you leave to your children grandchildren, or other beneficiaries.
Will I lose control of my assets?
No, the living trust is a written legal document that allows you, as the trustee(s), unlimited access to and full control of your assets during your lifetime. It also enables you to pass property after your death to family, friends and/or loved ones. It allows you to appoint someone (a successor trustee) to make certain your property goes to the ones you choose after your death.
I thought a will avoids probate?
Many individuals are under the impression that their will alone is sufficient to avoid probate. Unfortunately, a will is simply an expression of your wishes and must go through some kind of court process before the assets can be distributed to the heirs.
The reason probate is needed is because the owner of the property or asset is deceased. Once the owner of the asset has died, the probate court grants a fiduciary (the Executor, Administrator, of Personal Representative) the authority to handle their affairs and supervises the legal process needed to take their name off the title of an asset and put it in the new owner’s name.
Will joint tenancy avoid probate?
Putting your children’s name on your property does not generally completely avoid probate. Not every asset is capable of being owned jointly, and not every type of joint ownership automatically transfers ownership to the surviving owner when one dies. Joint tenancy can be a valuable part of an estate plan, however without more it is an incomplete and insufficient method of planning. Just a few of the common drawbacks to relying on joint tenancy alone as a planning option include: joint owners can’t file tax returns, or sell real estate alone; the co-owner may own the accounts and property outright at the other person’s death; and the property and accounts may be subject to co-owner’s marital or creditor obligations and problems.
How does a Living Trust Work?
For a trust to be effective it has to own title to the property or asset. Remember, when you transfer title of your assets into the trust it is called “Funding your Trust.” Funding is the process of transferring the name on accounts or property to the name of the trust. For example, accounts in the name of Bill and Mary Stevens, would now be held as “Bill and Mary Stevens, Trustees of the Stevens Family Trust dated date signed and year“
When the assets are in the name of the trust there is no need for probate since the estate is now controlled by the trustee of the trust. You or you and your spouse can be the primary trustees receiving full control to buy, sell, borrow or transfer in the case of a spouse’s death. After both spouses pass, the trust identifies the person who will act as successor trustee. The trust gives that person the right to manage all assets in accordance with your wishes which are made known in the trust document.
For more information and to prepare a living trust please contact The Law Office of Richard W Hartman III at (703) 255-7005.
Richard W. Hartman III founded The Law Office of Richard W. Hartman III, Attorney & Counselor at Law, PLLC to provide clients with honest, ethical, efficient, quality legal services.
Mr. Hartman began his career with a boutique trust and estate law firm, concentrating his practice in the administration of trusts and estates, which included the preparation of fiduciary accountings for trustees, executors and conservators. While working with that firm he also represented fiduciaries and beneficiaries alike in litigation involving challenges to the validity of wills and trusts, as well as protecting the interests of beneficiaries. Mr. Hartman also spent a considerable amount of his time with that firm assisting clients with guardianship and conservatorship matters.
Through those experiences Mr. Hartman came to desire a better way to serve clients and practice his profession. It became clear that offering his professional services directly to the general public was the best way Mr. Hartman could assist clients while maintaining the highest ethical and professional standards for himself, his work product, and his firm. This realization led Mr. Hartman to form The Law Office of Richard W. Hartman III, Attorney & Counselor at Law, PLLC.