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A Living Trust, Not a Will, Avoids Probate
A Living Trust, not a will, is the best way to avoid probate
while maintaining control over the
disposition of your assets. Only a living trust allows you to gather
all
your assets into one place thus facilitating the payment of taxes and
other
expenses in a fair and equitable manner. The living trust's
centralization
of asset control avoids the difficulties created when separate assets
are
distributed, through pay-on-death (POD), to several individuals before
your estate's administrative expenses are paid. Who gets left with the
responsibility of collecting the funds necessary to pay your final
income
or estate taxes? Placing all your assets in a living trust avoids that
difficulty while still allowing the same individual beneficiaries to
receive
the distributions you intended them to get -- but after your
administration
expenses are taken care of. Additionally, a living trust allows you to
change your mind, unlike that other probate-avoidance tool, joint
ownership.
Creating a living trust is very much like creating a will. The
living
trust and will serve almost identical purposes -- the collection of
your
assets, payment of your administration expenses, and distribution to
your
loved ones -- with one critical difference. A will requires
probate.
A living trust avoids probate. Everything that a will can do to
implement your estate plan, can be accomplished with a living trust.
Estate
planning need not entail probate -- unless you decide that your
situation
would best be handled under the supervision of a probate court. For
most
estate plans, however, probate is an unnecessary, costly and
delay-ridden
approach that can and should be avoided.