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What is a Living Trust?

by Jeffrey Asher, Estate Planning Expert
January 22, 2014

Question: What is a Living Trust?

Answer: A Living Trust is very similar to a Last Will and Testament, in that both are written instructions from you to your loved ones as to how you want your property to be managed and/or distributed upon your death.  Both a Living Trust and a Will can effectively distribute property upon your death, appoint representatives (such as, a Trustee for a Living Trust or an Executor for a Will) to manage your affairs upon death, set up protective trusts for your loved ones, and provide for estate tax savings.  However, whereas a Will requires a court to approve its form and terms to give it legal validity and to give the Executor the legal authority to act pursuant to the Will (all of which is called “probate”), a Living Trust is intended to be a private document amongst the family.  With a properly prepared Living Trust, there should be no need for a court to be involved at all in the administration of the Living Trust.  For this reason, a Living Trust is said to “avoid probate”.  The Trustee appointed in the Living Trust is authorized by the terms of the Living Trust, without court involvement,  to manage the property of the Living Trust.  This is especially helpful for someone who owns real estate in more than one state.  Typically, when a person owns real estate in more than one state, his or her Will (when they die) must be probated in each of those states.  However, if each of the pieces of real estate were owned by the Living Trust (instead of individually by the deceased owner), then the language of the Living Trust and the authority given to the Trustee would govern, and probate in each of those states could be avoided.

A Living Trust may also be helpful to someone who worries about people objecting to his or her Will.  Because a properly prepared and funded Living Trust can avoid probate, it becomes difficult for disgruntled heirs to attack.  To do so, the disgruntled heir would have to hire an attorney and bring a lawsuit against the Trustee.  With a Will, during the probate proceeding, heirs are given their time in court to air their grievances or state their objections to the probate of the Will.  The opportunity given to objectants, and the potential for objections, are part of the typical probate proceeding.

Moreover, because a Living Trust is effective upon signing, as opposed to a Will that is effective only upon death, a Living Trust has the potential of managing your person and/or property during periods of mental incapacity.  The language of the Living Trust would merely have to appoint a Trustee during periods of mental incapacity, with procedures and rules for determining mental incapacity, and the Trustee would be empowered to act during these periods of mental incapacity.”

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Jeffrey Asher is a prominent Trusts & Estates and Elder Law attorney in Westchester County and New York City. Mr. Asher concentrates primarily in the areas of Estate Planning, Probate and Estate Administration, Elder Law, Medicaid Planning, and Special Needs Planning. Mr. Asher provides comprehensive legal services, tailored to meet your specific needs.

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