The Benefits of an Inter Vivos Trust
When you are planning for the distribution of your assets after you die, there are a number of tools available. A living trust, also known as an “inter vivos” or revocable trust, offers a number of advantages.
Assets in a Living Trust Do Not Go through Probate
The probate process is designed to ensure the orderly distribution of any property owned by a decedent at the time of death. However, probate may not be optimal for some people as the probated will is a public document and some people desire privacy as to its contents. Also, you are required to provide notice to all heirs at law of the decedent even if they are not beneficiaries of the Will.
However, a trust is a separate legal entity, with the capacity for owning property. Any property placed in trust is no longer owned by the person who transferred it there. Accordingly, because that property is not owned by the person at death, it does not have to go through probate.
There’s Less Likelihood that the Trust Will Be Challenged
One of the most common ways to challenge a will is to allege that the testator (person making and executing the will) lacked mental capacity at the time the will was signed. That rarely happens with a living trust. With a living trust, you are typically involved in the management of the trust on a regular basis. That’s customarily sufficient to demonstrate the legal capacity to create the trust.
A Living Trust Can Help Your Family Address Subsequent Issues of Competency
If, after executing the living trust, you experience competency or mental capacity issues, a living trust can simplify matters for your spouse or loved ones. The trust will typically have provisions that go into effect if you are incapacitated, empowering a successor trustee to manage the affairs of the trust. If you don’t have assets in a trust, your loved ones may have to ask the court to establish a conservatorship, which can be a lengthy process.
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