A living trust as an estate planning tool that provides numerous different benefits. The first thing you should understand about a living trust is that you do not have to be wealthy to enjoy these benefits. A living trust can be of value to people who are of relatively ordinary means, and this type of trust actually would not satisfy some of the objectives that very high net worth individuals have.
When you have a living trust in place, you can go forward with peace of mind, because you still have control of the assets. You can act as the trustee while you are alive and fully capable of making your own decisions, and you can also serve as the beneficiary at first.
To facilitate asset transfers after you pass away, you name successors to take over these roles after you pass away. The trustee would follow your instructions and distribute assets to the beneficiaries in accordance with your wishes. These distributions would not be subject to the process of probate, and this would not be the case if you were to use a last will to state your final wishes.
Probate provides interested parties with certain protections, but it can be time-consuming and expensive. Plus, anyone who wanted to contest a will could present an argument during probate.
Contesting a Living Trust
Though living trusts are very useful on a number of different levels, they do not satisfy every single objective. There are people who are under the assumption that you cannot contest a living trust, but this is not exactly true.
It is true that the probate process would not be a factor when you use a living trust, so this readily available window of opportunity would not exist. However, someone who wanted to contest the terms of a living trust could do so by filing a lawsuit.
You may hear someone say that you can prevent this through the inclusion of a no-contest clause. A no-contest clause would allow for the disinheritance of a beneficiary who files a lawsuit to challenge the terms of the trust.
This would certainly act as a powerful disincentive, but it would not absolutely prohibit a beneficiary from filing a lawsuit. The beneficiary could take his or her chances and go forward with the litigation.
Living Trust Report
To learn more about living trusts, download our special report. The report is free, so there are no risks involved. To obtain access to your copy, click this link and follow the simple instructions: Free Report on Living Trusts.
To Schedule a Free Consultation
If you are interested in the possibility of working with our firm after learning these facts, please select our “Workshops” tab to RSVP for a free estate planning workshop. At that workshop you will be offered a free one-hour consultation with an attorney: www.collinslawgroup.com/seminars/
- Can the Beneficiary of My Life Insurance Policy Be a Trust? - May 30, 2023
- Are Your Digital Assets Included in Your Estate Plan? - May 27, 2023
- What Is a QTIP Trust? - May 25, 2023
