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You may be thinking, “Why do I need a trust? I don’t have a large estate and don’t need any fancy estate planning. And getting a trust is expensive and complicated.” We’re going to explain, in a few simple words, why you will probably benefit from a living trust.

A living trust is a written document that allows you to transfer your assets after death without requiring the court process called probate. The trust, not you, owns the assets you put into it, and the trustee has control over those assets.

You can think of a trust as being like a company, in which you (and your spouse, if married) are the sole employees and managers, and you transfer all your assets to the company. The company now owns these assets, not you. However, you still have full control over them (as the trustee). The company documents include written instructions for who takes over the company if you pass away or are disabled.

Here are the3 main reasons to have a trust:
1) A Trust Avoids the Costs and Delays of Probate

Probate typically costs 4% to 8% of the total value of the estate and takes from 6 months to several years. A trust distributes the bulk of the estate’s assets shortly after death with minimal costs. Although a trust has an initial cost, it’s much cheaper in the long run.
2) A Trust Allows You to Stay in Control of Your Assets

lock-booksThe trust spells out how to manage your assets in case of your incapacity or death. It also says whom to appoint as successor trustee if you become incapacitated. Otherwise, if you become incapacitated, even temporarily, and only have a will without a durable power of attorney, the court will appoint someone to oversee your affairs who will have to report to the court for approval of expenses, sale of property, etc. While alive, you can change the trust or even revoke it as you wish.

3) A Trust is Private

Probate is a public process. Anyone can look up the records, read the will, find out who the beneficiaries are, and look at the claims of creditors and the list of assets. Unscrupulous sales people often go poking through these files, as do disgruntled heirs. Curious friends and neighbors can do likewise.

A living trust, on the other hand, is a private document. Only the trustee and the people you share the trust with know what is in it and who the beneficiaries are. If you become incapacitated, it will remain a private family matter. Upon your death, no announcements need to be placed in the paper to invite creditors to file claims or notify unhappy relatives who might want to contest it.

Frank-GreenfieldAGT encourages its clients to have a living trust as a key component of their financial plan. As a convenience to our clients, we have arranged for Frank Greenfield, an attorney in private practice with more than 40 years of experience, to meet with clients in our office. Frank has advised hundreds of AGT clients in the area of estate planning and will explain complex legal documents in a respectful and understandable manner. Please contact us to set up your free consultation.