This article is intended for educational purposes only and is not legal advice. For guidance on your personal situation, please contact a lawyer.
I'm usually not a lazy person when it comes to financial matters. For example, I take the time each month to review my credit report, and I check up on my investments pretty regularly.
But when it came to estate planning, my arm needed a little twisting by my husband to get moving. Maybe it was the uncomfortable nature of it that caused me to keep putting it off. But I'll admit that it took me a while to schedule an appointment with an estate-planning attorney to discuss options.
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One of the interesting things I learned during that meeting is that a will isn't your only choice for passing assets down to heirs. There's also the option to use a living trust.
To be clear, I knew that living trusts existed. I just didn't think they were meant for people like me. But now that I'm aware that living trusts aren't just for the ultra-wealthy, I'm seriously interested in using one for a big reason.
A benefit that means a lot to me
A living trust is a legal arrangement you can use to transfer assets to your loved ones. In that regard, it's similar to a will, only with one major difference.
When you use a will to pass along assets, that will needs to go through a process called probate, which is how a court proves its validity. Probate can take a long time, and it can also cost your estate a fair amount of money. So that alone makes a will less than optimal.
But here's the thing that really bugs me about wills and probate. As part of that process, a will becomes a matter of public record. And the idea of any old person being able to look up details of my family's finances bugs the heck out of me.
For this reason, I'm extremely inclined to set up a living trust for my family instead. I wouldn't want people outside of my inner circle knowing how much money I have in my bank account or investment portfolio now -- so why would I want the details of my estate to made available to the public?
An option worth considering
If you assumed that living trusts were only for rich folks with tons of money, I wouldn't blame you. I used to assume the same.
But you should know that you don't need to be super rich to take advantage of a living trust. And if you like the idea of protecting your family's privacy, then I suggest that you meet with an estate-planning attorney to discuss your options for setting a living trust up.
Now I will warn that based on what I've been told so far, there can be a higher cost associated with putting a living trust in place than a will. And the extent of that cost will depend on the nature of your assets, among other things. But I'm willing to deal with that if it means keeping my family's financial details under wraps.
