When it comes to an estate plan, protecting inheritance is one thing but avoiding probate can be just as important. Each individual and family will have different needs and goals when drafting a comprehensive estate plan, so a wide variety of documents could apply, depending on the situation. However, if one of the primary goals is indeed to avoid probate as much as a possible, a recent article pointed readers toward the various benefits of establishing a living trust.
For starters, what exactly is a living trust? Well, this type of trust is usually established by a person who wants to transfer assets to the trust, but also maintain control of what happens with those assets. While the person is still alive this setup is what is known as a "revocable trust," allowing the person to end the trust if need be, or make changes to the terms of the trust. Upon death the trust would become irrevocable, and the assets in the trust will pass to the designated beneficiary, often completely outside of the reach of probate.
Further, with the slow but steady recovery of the housing market living trusts may again become a popular option. As described in the recent article, this is because a person with property in multiple states would be able to place ownership of the properties in the living trust, thereby avoiding separate probate processes in each individual state.
Of particular interest to many people is the fact that property distribution through the use of a living trust is often private - quite the opposite of the probate process which is usually a matter of public record. Privacy is a big concern for many people these days, for a variety of reasons, so a living trust could be the right option for those with issues in this area.
Source: The Chicago Tribune, "Exploring pros and cons of a living trust," Benny L. Kass, June 28, 2013