Life is short. And while no one wants to focus on the end, forcing yourself to do so can ultimately makes things a bit easier for your loved ones—not just emotionally, but financially too. One way to deal with the latter concern is to put your home in a living trust.
A living trust is a legal document that places your assets into a trust for your benefit (you’re the trustee) while you’re alive and then transfers those assets, via your “successor trustee,” to beneficiaries after you die or become disabled.
Think of it as a bucket filled with your money, property, and other assets. You’re free to do whatever you want with the contents of the bucket, such as sell stock or property. But after you’re gone, whatever’s left in the bucket goes to your heirs.
How is a living trust different from a will?
Like a living trust, a will is a legal document that instructs how to distribute your possessions after your death. If you have a will when you pass away, your estate goes into “probate,” a legal process where the court supervises the distribution of your estate. It appoints somebody (usually your executor) to collect information about your assets and liabilities, pay your bills, then distribute the remainder of the estate to your beneficiaries according to your wishes. Probate includes a lot of paperwork and can take up to a year.
However, if you set up a living trust while you’re alive, you typically pay a lawyer anywhere from $1,500 to $3,000 to do the paperwork ahead of time and avoid court supervision of the most valuable items you own after you’re gone.
“You’ve done all the paperwork so your loved ones don’t have to,” says Lorni Sharrow, an estates and trusts attorney with the Denver law firm Moye White. “It’s a pretty nice thing to do for people.”
Whatever you’ve placed in the trust can be distributed in a matter of weeks after your demise, not months. And as a bonus, a living trust is private, whereas a will is a public document, so everyone knows what and how much you did (or didn’t) leave to your least favorite relatives.
If would like to discuss aspects of Living Trusts with someone from our team, please call (865) 357-7370 or email us @ will@sdp-planning.com
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