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estate planning and elder law

Using A Living Trust In Estate Planning

Do Estate Planning the Right Way!
I understand that most people don’t need a living trust because probate is simple in the state, but can having a living trust save you time or money?’s recent article entitled “Will a living trust save time and money when settling an estate?” explains that probate avoidance is one major reason to have a living trust.  Using a living trust in estate planning is an important strategy that is part of every estate planning discussion between clients and the attorneys at Beck, Lenox & Stolzer Estate Planning and Elder Law, LLC, LLC.

Many people who have living trusts also have what are known as “pour-over wills.” The reason? Individuals frequently have assets that they have not placed into a living trust, such as tangible personal property like furniture and household furnishings, a car, or a small bank account are examples of estate assets. It may also be necessary to open an estate because of unclaimed funds held by the state, a tax refund or return of insurance premiums.  Those estate assets not in the living trust will pour over or pour into the trust at the death of the person who created it.

Using living trusts in estate planning have the benefit of privacy and the elimination of challenges to the estate. A living trust can also be used to separate assets acquired before a marriage; or as a vehicle to manage the assets of a person with diminished or lack of capacity, such as a person suffering from dementia.

It’s important to note that financial institutions can freeze up to 50% of the assets in an estate until a tax waiver is obtained. However, tax waivers aren’t required in order to transfer legal ownership of trust assets after the death of the person who created the trust.

There can be a few disadvantages to creating a living trust:

  • The cost of creating a revocable living trust and a pour-over will is usually a bit more than the cost of preparing just a will.
  • There may also be expenses involved with transferring assets, such as real property, into a living trust.
  • If the individual has relatively few assets that would be subject to probate, the cost of establishing a living trust may be more costly than administering an estate.

Conversely, the legal fees incurred in administering a probate estate may be more than legal fees incurred in administering a trust after the death of the trust maker.  Moreover, the time it takes to settle an estate may be longer than what it takes to distribute trust assets. That is because it can take months to probate a will and obtain a tax waiver.

Speak with an experienced estate planning attorney about whether a revocable living trust makes sense for your unique circumstances.  Beck, Lenox & Stolzer attorneys are here to assist you.

Reference: (Feb. 8, 2021) “Will a living trust save time and money when settling an estate?”


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