Establishing a living trust can be an efficient and effective way to transfer property to loved ones without the expense, hassle, delays, and public disclosures of a probate proceeding. Essentially, a living trust is similar to a will. However, the important difference between a will and a living trust is that property left by will must go through the probate process whereas property left by a trust can simply be transferred to the beneficiaries quickly and without the need and expense of court intervention. The Trustee simply distributes assets to the named beneficiaries as long as those assets have actually been placed inside the trust.
People often carry the misconception that having a trust is very complicated and is only for the super-rich. This is simply not true! A trust does not require any special accounting or tax records, it simply requires changing the name in which assets are held. For example, once a trust is created, a house in the name of John and Mary Smith should be transferred to the Smith Living Trust. Names on bank accounts should also be changed to the name of the trust. However, the fact that the assets are now in a trust has no practical affect on ones rights to, or interest in, his or her assets. John and Mary may still sell their house, spend their money, write checks, obtain mortgages, or give their assets away during their lifetimes. Essentially, a living trust is a document that only becomes important upon death. With a trust, upon death, property placed in a trust can be transferred privately and without the waste of time, money, and headaches of probate.
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