Essentially a living trust performs the same function as a will without having to go through the money, delay, and hassle of probate. In other words, a living trust is a legal entity that owns your property during your lifetime, while still allowing you to manage and control it, and then transfers your property to those you wish upon your death.
An example may help to illustrate this. Let's say John (known as the grantor) creates a living trust and thereby transfers the ownership of his home, cars, and investments into his living trust. John also names himself as trustee of the living trust and the bank as the successor trustee. John then names his wife and children as the beneficiaries (or recipients) of all of the trust property.
While still living, John does not personally own the home, cars, and investments (they are owned by the trust) but he can still manage and control this property. Upon his death, the bank becomes the trustee and transfers ownership of trust property to John's wife and children (the beneficiaries). However, unlike a will, the transfer of all of this property does not have to go through probate, which saves a lot of time and money.
For this reason, some attorneys recommend that everyone create a living trust. While there are certainly major benefits to a living trust there are also some circumstances in which a living trust may not be the best choice. There are other options to avoid probate and sometimes there may actually be some benefits to going through probate. This is why it is beneficial to talk with a local estate planning attorney to determine what is the best fit for you. To set up a free consultation with J.Cutler Law, click on the link below.