A living trust is a means of controlling property during your lifetime and causing it to be distributed after your death. It is often used instead of a will to transfer property, chiefly because it avoids the court probate process. Even if you have a will, there are advantages to making a living trust a part of your estate plan.
Because it is revocable, a living trust is inherently flexible. When you create a trust, you can appoint yourself the trustee. You can add most forms of property to the trust and still retain full use and control of it. You are free to remove, sell or take a loan on the property held by the trust. You can designate beneficiaries of the trust, who may be removed or substituted at any time. Any distributions to beneficiaries, either during your lifetime or after your death, may be modified at your discretion.
The main reason people use a living trust is to avoid probate, the court process by which a will is approved and carried out. When a person dies having a will, their estate must go through probate. The estate is settled by an executor, if one is named in the will, or by a court-appointed administrator. The executor or administrator inventories the decedent’s assets and debts and — after paying all legal debts, taxes and court fees —distributes the remainder to the beneficiaries designated in the will.
However, probate does not always go smoothly. A will is subject to challenge by heirs of the decedent and by others having an interest in the estate, all of whom must be given notice. Will contests and problems relating to assets and debts of the estate can cause significant delays. An estate may not be settled for months or even years after the decedent’s death. Probate also involves fees and expenses that must be paid from assets of the estate.
By contrast, a trust is a private arrangement. The trust property, the identities of the beneficiaries and the amounts distributed are confidential. Almost no information is divulged to anyone other than the applicable taxing authorities. Contests to trust administration are rare and require bringing a separate lawsuit.
A living trust can either avoid probate entirely or minimize the size of the probatable estate. Any property passing through the trust is not subject to probate, so the court process is greatly simplified. Your will can also designate the trust as the recipient of any property that was left out of the trust during your lifetime. All of this means that the trust beneficiaries will receive their shares of assets faster and with less cost.
Gesmonde, Pietrosimone & Sgrignari, L.L.C. in Hamden and East Haven assists people throughout Connecticut with estate planning. Contact us online or call 203-745-0942 for a free initial consultation.
Gesmonde, Pietrosimone & Sgrignari, L.L.C. is located in Hamden, CT and serves clients in and around North Haven, Hamden, Waterbury, Bethany, Milford, Wallingford, Prospect, Woodbridge, Northford, Madison, Beacon Falls, Branford, Cheshire, North Branford, East Haven, Naugatuck, Meriden, Ansonia and New Haven County.
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