Having a legal document that details exactly what you want to happen with your assets after death is a crucial part of any estate plan. One way to make these wishes clear is through a living trust. Not only does a living trust bypass the expensive and time consuming process of probate, saving the grantor time and money, it also provides privacy since the contents of the trust are not made public. Before considering whether or not a living trust is right for you, it’s important to understand exactly what kinds of assets are commonly placed inside this legal tool.
Homes and Real Estate
Homes and other real estate are one of the most common assets groups to be placed inside of living trusts. As mentioned previously, not only will the property bypass probate, but the beneficiaries will save money by avoiding court fees and the like. Additionally, homes purchased with a loan may still be placed in a living trust. That being said, any property placed into said trust that is not paid off will automatically transfer the loan into the trust as well leaving the beneficiaries of the property responsible for making the necessary outstanding payments.
Businesses
Businesses can also be placed into a living trust. Aside from saving money on court fees, if the business is still running at the time of your death, going through probate would require the courts to determine the new owners of the business. The fact is that probate can last anywhere from several weeks to several months, which puts the business at potentially crippling risk if a new, competent and willing owner isn’t there to take over operations. Since a living trust does in fact bypass probate, the new owner would have already been appointed in the living trust and could assume his or her new position immediately.
Bank Accounts
The simplest type of asset that can be placed into a living trust is a bank account. Any type of bank account is legally permissible, including checking accounts, savings accounts, investment accounts, retirement accounts, etc. Interestingly enough though, bank accounts do not need to be in a living trust, or any trust for the matter, to bypass probate. Most banks will allow you to name a “payable-on-death” beneficiary for all of your bank accounts which automatically transfers ownership of said accounts to the listed beneficiary upon your death.
Without a doubt, the living trust is quite a useful legal tool for those looking for effective ways to have their assets transferred to their beneficiaries after death. If you or a loved one are looking to set up any kind of trust, we highly recommend you to consult with a licensed estate attorney who can guide you through the rough waters of properly setting up your estate plan.