This article is intended for educational purposes only and is not legal advice. For guidance on your personal situation, please contact a lawyer.
It's never a comfortable thing to think about estate planning. But it's an important thing to do nonetheless.
Years ago, I took the very important step of putting a term life insurance policy in place for my kids. I also decided to write up a will with the help of a lawyer, and it gave me peace of mind to know that step was taken care of.
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But even though I have a will, I'm also seriously considering setting up a living trust for my family. And there's a big reason for that.
A hidden benefit I can appreciate
A living trust is a legal arrangement that allows you to pass assets on to other people. It's similar to a will in that regard, but with one key difference.
The benefit of a living trust is that it's not subject to probate the way a will is. Probate is the legal process of confirming a will's validity. It's also a process that has a tendency to be drawn-out. And the more complex the estate, the longer probate might take to wrap up.
When probate drags on, it prevents your heirs from getting their inheritance sooner. And it can also be a costly process, to make matters worse. So avoiding probate with a living trust could make it so your heirs get their hands on their inheritance more quickly and with less aggravation.
But that's not even the main reason I'm interested in a living trust. My motivation stems from wanting to keep my finances -- and those of my loved ones -- private.
See, when a will goes through probate, it becomes a matter of public record. This means that anyone can pull up records and look up the specific details of your will.
Frankly, that creeps me out. I wouldn't want random people to get access to my savings or retirement account now and see what those balances look like. Why would I want them seeing what assets I'm designating to be passed along?
If that idea creeps you out, too, then you may want to consider a living trust like I am. Because a living trust isn't subject to probate, its details can remain private.
Is a living trust right for you?
I'm well aware that a living trust will likely cost a lot more than what I paid to put my will in place. But I'm also willing to pay that money for the benefit of privacy and added peace of mind.
If you're not sure whether a living trust is suitable for your family, connect with a lawyer who works in estate planning and get a consultation. They can walk you through the finer details so you can make an informed decision.
But also have a conversation with the people who stand to inherit your assets. Ask them how they feel about you using a will versus a living trust. You may even want to encourage them to meet with an attorney with you so they can understand the differences and come to a decision they, too, are comfortable with.
