What are the Advantages of a Living Trust?
A living trust has several advantages over a will. A living trust allows the property in the trust to be quickly transferred to the beneficiaries upon the grantor’s death rather than waiting for probate to be completed. A living trust is usually less expensive to administer than a will because it is not subject to probate, so the executor does not have to hire a probate attorney or spend his time on the probate process. A living trust protects the grantor’s privacy because the contents of the living trust are not made public at the grantor’s death, unlike when a will is probated. If the grantor owns real estate in more than one state, the real estate can be transferred to the living trust, eliminating the need for probate in multiple states. A living trust also allows a trustee to manage the assets of the trust for the grantor in the event of the grantor’s disability or incapacity, which can eliminate the need for a conservatorship proceeding. If disgruntled heirs are a concern, a living trust may be a better estate planning method than leaving property by will because it is much more difficult to successfully contest a living trust. See No Contest Clauses.
Do I Need a Will If I Have a Living Trust?
A living trust is not a substitute for a will. If you create a living trust, you still need a will to provide for the distribution of any property you own at your death that was not transferred to the living trust. The type of will that is usually used with a living trust is called a pour-over will.
If you want to disinherit a spouse, child, grandchild, sibling or other heir, you cannot fully disinherit a person by making a living trust. To disinherit someone, you also need to make a will.
Guide to Living Trusts
If you have more questions about whether a living trust should be part of your estate plan, read our Guide to Living Trusts.
Can I Change or Revoke My Living Trust?
A living trust may be revocable or irrevocable. A revocable living trust becomes irrevocable upon the grantor’s death. With an irrevocable living trust, the grantor cannot revoke the trust after it is made and cannot rescind the terms or any transfer of property to the trust.
See our page on codicils and amendments for information on how to amend a living trust. For information on the steps involved in transferring property out of a living trust and documenting the revocation, see how to revoke a living trust.
What is a Living Trust?
A living trust allows the grantor, the person making the trust, to transfer all or part of his property to the trust so it does not have to pass through probate at his death and can instead be directly distributed to his beneficiaries.
A living, or inter vivos, trust is created while the grantor is still alive. The grantor typically serves as trustee while he is alive and names a successor trustee in the trust document to serve upon his incapacity or death. The grantor can change the beneficiaries of the trust or terminate the trust while he is alive.
A living trust may be written to terminate upon the grantor’s death, at which time the trustee distributes the trust property to the beneficiaries. However, a living trust may also be written to continue for the benefit of the grantor’s spouse and/or children after his death and terminate at a later date.
For information about our Living Trust Checklist, an estate planning form designed to help you create and fund a living trust, visit our Living Trust Checklist page.
If You Want to Use a Living Trust
Living trusts have been the subject of criticism in recent years as expensive and unnecessary. This is due in part to the actions of living trust mills. Living trust mills have misrepresented the advantages of a living trust for some individuals. Living trust mills primarily target senior citizens. Some states have taken steps to simplify their probate proceedings to make it easier and less expensive. Nevertheless, probate is a process that takes much more time than transferring assets to beneficiaries of a living trust. Even in states where the probate process has been simplified, probate can take longer than one year. Also, if privacy of the grantor is a concern and the goal is to avoid disclosure of the amount of assets owned by the deceased, a living trust may be the best option.
Not everyone needs a living trust. Trusts are estate planning devices that greatly benefit some families, but are unnecessary for others. Do your research to learn what type of estate plan is recommended in your situation. If you expect to have a small estate and the costs of creating a living trust are an issue, talk to a lawyer about the probate laws in your state and your individual estate planning concerns. There may be alternative methods you should use.
To Learn More About Living Trust Agreements
If you want to make a living trust part of your estate plan, the following books are suggested reading:
