In my last column, I addressed some reasons you don’t need a trust.
There are many situations in which a trust is very effective. For example, I recently stated that a trust is not typically effective to avoid the cost of probate. However, it may be very effective to avoid paying for probate in two different states.
Probate is the process to ensure that property owned by a deceased person can be conveyed to someone else. But probate in Idaho can’t address a condo or cabin located in another state. “Snow birds” who own a home here, and a second home in Arizona, may want to put both properties into a trust and avoid paying two attorneys in two different states for probate.
Some people also favor the privacy that a trust can provide. When a Will goes through the probate process, the personal representative (sometimes referred to as the executor) must compile a list of the deceased person’s assets and file that document with the court, or at least file a notice that the inventory is available. Certain “interested parties” have a right to review the inventory, even if they won’t be receiving property.
On the other hand, the actual beneficiaries of a trust must be informed of the trust and their rights. But others do not have a right to be involved.
While these are good reasons to consider a trust, a properly drawn trust actually provides many more advantages. As I described recently, a trust functions much like a wagon in that it allows you an effective method to hold your assets and control how they are used. Specifically, it allows you to maintain a significant level of control over the use of your assets even after you become incapacitated or pass away. A will allows you only to state who receives your things after you pass away.
That flexibility and control can be a significant advantage depending on the risks to your estate and the complications that arise in each of our lives.
© 2015 Steven J Wright