What should you know about a living trust?


Quick Answer

By establishing a living trust, a person can help avoid probate, plan for the possibility of his incapacitation, and allow control over what happens to his assets and property after his death, explains Legal Zoom. There is no need for court intervention with a living trust.

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Full Answer

There is no minimum or maximum size estate that can establish a living trust, explains Legal Zoom. A living trust helps to avoid the expense of probate. Living trusts can not only ensure proper placement of assets after a death, but a living trust can be used to manage property if the person creating the trust becomes disabled or ill. The trust appoints a successor trustee to manage the property, and that successor trustee distributes the property according to the terms of the trust after the owner of the trust passes away.

A living trust can be more costly than a will because there is the added cost of actively managing the trust after it's created. A living trust must also be funded, so the only assets that are controlled are the assets placed in the fund. Bank accounts, stock certificates and even 401(k) accounts must be transferred to the living trust so that they are controlled by the trust, explains Legal Zoom.

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