To avoid the need for probate, and even a Will, a Living Trust, also called "Intervivos Trust", can be established. A living trust must be created prior to death and is designed to make sure all property and assets owned by a decedent are transferred at death to his or her heirs according to the decedent's wishes.
Living Trusts:
Creating a "living trust" is a very effective way to insure that property and assets owned by the decedent are transferred to his or her heirs according to the decedent's wishes. Having a living trust helps to protect individual and family privacy because the terms of a living trust are not disclosed to the public, unlike a Will. Additionally, living trusts most often don't go through the probate court system.
Setting up a living trust may allow for quick distribution of property and assets, where as those that go through the probate process can take months or even years to distribute due to required legal and court proceedings. There are sometimes a number of tax benefits to having a living trust, especially for those with a large number of assets.
Although there are some advantages to a using a living trust instead of a Will, there are also disadvantages. The cost of setting up a living trust and administering it prior to death is usually higher than the cost of drafting a will. If you are thinking about creating a Living Trust instead of a Will, Estate Finance highly recommends that you first meet with a qualified attorney to find out which option will work best for you. An Estate Finance staff attorney would be happy to refer you to a qualified attorney in your area to assist you.
The legal name for a living trust is a "revocable intervivos trust". "Intervivos" means that it was created while the decedent was alive. "Revocable" means that it can be revoked or changed by the decedent at any time before he or she dies. For purposes of a living trust, the decedent is called the "settlor" or "grantor" at the time the trust is created.
In a living trust, if the settlor is named as the trustee, as is common, the trustee manages his or her property before death. Like a Will, the living trust dictates how their assets and the income earned by the trust are distributed after death. If the settlor becomes incapacitated or disabled, the trust is in place to manage the financial affairs, usually by a successor trustee, named in the trust. In this situation the trust provides a comprehensive disability plan.
A Pour-Over Will is necessary to distribute any property that is acquired in the name of the settlor after the living trust was established and any property that was not transferred into the trust in the first place. Thus, a "pour over" Will is a necessary requirement of a living trust.
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