3 Reasons to Consider a Living Trust for Your Assets

Legal instructions are important to leave behind when you pass away. For most people that means having a will, but some people should consider having a living trust. A will tells a court what to do with your assets, while a living trust is a legal entity that controls your assets after you die.

Here are three reasons why it may be helpful to have a living trust:

1. You want to avoid probate court.

Living trusts avoid probate court.  Probate court is a judicial process that many assets included in wills must go through.

There are a lot of great reasons you will  want to consider when deciding on whether to form a trust for your assets. Probate is a lengthy legal process that can delay your heirs their  inheritance for several months at the very least.. It can be costly and your state may charge fees based on a percentage of the assets you leave behind. 

Assets in a living trust avoid probate court all together. When you pass away, control of the trust transfers to a person you choose, which may be a  relative or a paid professional trustee. They are tasked with managing the trust’s assets according to the instructions you leave behind.

2. You have heirs with special needs.

A trust can provide ongoing financial management for an heir with special needs who may never be able to manage their own affairs. Your heir may also lose eligibility for some forms of government assistance if they are granted their inheritance outright through a will. A living trust could help avoid that situation.

3. You want ongoing conditions on an inheritance.

While a will generally just distributes assets immediately after your death, a trustee can be given detailed instructions on how to handle the assets over the course of many years. You could instruct that an inheritance is doled out in thirds every ten years. Or, you could make an heir's access to inheritance funds dependent on them avoiding legal trouble.

Remember, a trust only controls assets that have been placed into it, so assets outside the trust after your death won’t be immune to the probate process. Most importantly, you must have a trustee you can rely on to manage the trust. This person must be trustworthy and capable of following your instructions.