Many people think that they should use a last will as a vehicle of asset transfer. If you maintain direct personal possession of your property and you arrange for its distribution through the terms of a will, the estate administration process can be complex.
The executor that you choose in the will would be required to admit the will to probate after your passing. Your family members would not receive their inheritances right away. The probate court would supervise the administration of the estate, and inheritances would not be distributed until after this process was completed.
Depending on the circumstances, it could take a number of months, and there are complicated cases that can take years.
Considerable expenses can also accumulate during the probate process.
If you use a revocable living trust rather than a last will as a vehicle of asset transfer, the monetary distributions are not subject to the probate process.
The person that creates the revocable living trust is called the grantor of the trust. There is a trustee who administers the trust, and there are beneficiaries who receive monetary distributions from the trust.
The grantor of the trust can act as the trustee initially. In the trust agreement, the grantor names a successor trustee. This individual or entity will administer the trust after the passing of the grantor.
The successor trustee could also be empowered to administer the trust if the grantor was to become incapacitated.
You could name someone that you know to act as the successor trustee. From a legal perspective, any adult who is of sound mind could serve as a trustee.
However, you may not know someone who is qualified, and you may have longevity concerns. Conflicts of interest can also enter the picture.
You could avoid these drawbacks by utilizing a corporate trustee like the trust section of a bank or a trust company. When you use a professional fiduciary to act as successor trustee, you can be certain that the trust will be administered properly.
Free Report on Living Trusts
A living trust can be a good choice for you if you want to facilitate fast and efficient asset transfers to your loved ones. If you would like to learn more about living trusts, download our special report from the Reports section of the web site.