Living Trust vs. a Standard Will
All too often I get asked why an individual or family would need a living trust if they already had a Will. Regardless of what you’ve probably heard, a Will may not be the best plan for you and your family. A Will does not avoid probate when you die. In order for the Will to be enforced, it must first be validated by the states probate court. Do not assume that just because a Will is being validated by the Court, that its the best and only option. The Probate process can be extremely lengthy and expensive. Probate costs can range between 4%-10% of the total estate. Lets do some simple math: Lets assume an individual passes away, leaving their heirs a $200,000 estate in a Will. It could be months to over a year before the heirs see even a dime of the decedents estate. Furthermore the average probate cost for a $200,000 estate is around $14,000.
A Trust avoids probate because when you create a Trust, you transfer your property to the actual Trust. In other words the property which was one owned by “John Doe”, is now owned by “The Living Trust of John Doe”. Therefore “John Doe” does not own the property, but rather the Trust owns the property. So when John Doe passes away, there is nothing for the court to validate because John Doe did not own the property.
Another major problem with a Will is that a Will is a death document and only goes into effect after you die, and provides no protection if you become physically or mentally incapacitated. So the court could easily take control of your assets before you die, a concern of millions of families. With a living Trust, you get to decide how your assets and estate should be handled if you are incapacitated or disabled. A living trust provides you and your family with the protection that you need and they deserve.