A well structured, comprehensive estate plan can contain a number of different components. Many people are under the impression that estate planning revolves around the drafting of a will, and this is of course one of the ways that you can state your wishes concerning how you would like your assets distributed upon your death. However, when you utilize a will to this end the estate will have to go through the process of probate. The probate or surrogate court is charged with the responsibility of determining the validity of the will, and if the will was to be contested, this court would adjudicate the matter.
Probate does provide protection because it is supervising the administration of the estate, and when the matter is very complicated and there are numerous financial claims against the estate it can be a good thing. But the problem with probate is that it slows down the distribution of assets, and there are also costs involved. The court itself charges a fee, and there are legal expenses, accounting fees, and executor compensation that may also erode the value of the estate.
Many people are finding that a living trust is a good alternative to a will, and they are indeed very efficient vehicles of asset transference. The person who creates the trust is called the settlor or grantor, and the entity that manages the trust is of course referred to as the trustee.
When living trusts are used with estate planning in mind, the grantor also serves as the trustee, so the grantor still has complete control of the assets while he or she is alive. The grantor also appoints a successor trustee and names the beneficiaries of the trust. Upon the death of the grantor, the successor trustee administers the trust, distributing assets to the beneficiaries in accordance with the wishes of the deceased.
Living trusts are a good choice for many people depending on the details of your estate. If you would like to explore the possibility of creating a living trust, don’t hesitate to contact us at (314) 966-8077 to arrange for a free consultation.