The Living Trust: “What’s In It for Me?”

The benefits of a living trust include carrying out our wishes when we die, avoiding the cost, time, publicity and inconvenience of probate proceedings, and possibly saving our beneficiaries hundreds of thousands of dollars of federal estate taxes.
One reader recently observed, “That’s good for my children. When I’m gone, if I have a living trust, they’ll inherit my assets with little expense or delay. I pay now, and they save later, but what’s in it for me?”
Aside from the satisfaction of knowing that you have provided for your loved ones, a living trust may provide for management of your assets before you die, if you were to become disabled. (Believe it or not, in some instances, disability may be even worse than death, both for you and your family.)
Disability may occur suddenly: an auto accident, heart attack or stroke could leave you without contractual capacity and unable to conduct business. In this event, if you don’t have a trust or a power of attorney, bank accounts in your name alone would be frozen. Real estate in your name could not be sold or leased. Prompt decisions might have to be made: What assets should be liquidated to pay for your short-term or long-term care? What business properties may be held, at least temporarily? Someone would have to petition the court for appointment of a conservator to manage your financial (and also your personal) affairs.
Conservatorships are expensive and burdensome and take time to arrange. Business opportunities which arise during the time between the onset of your disability and the appointment of the conservator might be lost forever.
A properly drafted and funded living trust, with the appropriate related documents, insures that, if you became disabled, your Successor Trustee may take over your assets, make financial decisions and enter into legally binding agreements, without interruption of business or the need for court involvement in your financial affairs. Later, at such time as you are no longer disabled, you may resume control of your assets.
“What’s in it for me?”  A living trust may provide not only peace of mind for you and security for your loved ones, but also protection for yourself, during your own lifetime.
Jerry Kessler practices law in Santa Clarita. You may contact him at 661-255-1001.