If you’ve started to plan for the orderly distribution of your estate in the event of your death, you’ve probably wondered about whether or not a trust is right for you. This blog helps you understand what a trust is, why it can benefit you, and its advantages and disadvantages.
To understand the benefits of a trust, you need to have a basic understanding of the probate process. The probate process seeks to ensure the orderly distribution of property that you own upon your death. There are two primary ways that you can have the use of property, but not own it at the time of your death—through re-titling assets and through a trust. If you change the legal title to property, such that you own it jointly with anyone else, the property automatically passes to the joint owners at the instant of your death, and any property interest you had is extinguished.
A trust works a little differently. In essence, a trust is a separate legal entity, into which you can transfer property. When you transfer property into a trust, you relinquish ownership of the property, but have use and enjoyment of it as set forth in the terms of the trust. Typically, you’ll have what is known as an “inter vivos” trust, one that becomes effective while you are still living. Any property that you put in the trust during your lifetime stays in the trust when you die—accordingly, there’s no need to address the ownership or distribution of the property when you die, as you don’t own it.
The obvious advantage to putting property in trust is that you avoid the probate process, which can be expensive and time-consuming. As a general rule, you’ll pay a bit more up front for the preparation and execution of the trust, but it’s usually far less than the estate would pay if the property went through probate.
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At Barnard, Mezzanotte, Pinnie, Seelaus & Kraft LLP, we have protected the rights of individuals throughout Delaware County since 1980. We offer a free initial consultation. To schedule an appointment, call us at 610-565-4055 or 302-594-4535 or contact us online.