Does Everyone Need a Living Trust?

Does everyone need a Living Trust or is a Simple Will adequate for some people?

The question of whether a Simple Will is adequate is typically driven by the related question of whether a person wants a probate to be required when he or she passes away.

A person who doesn’t want his or her family and heirs to be required to go through the delay and expense of a probate proceeding will almost always want to utilize a Living Trust or a Family Trust to avoid that necessity.

The only situation where probate is not normally required is in the limited circumstances where the person who has died (1) owned no interest in any real estate and (2) had total possessions (including bank accounts, vehicles, etc.) with a value of less than $100,000.

So, back to the original question: A person who owns no real estate and has other possessions with a total value of less than $100,000 can utilize a Simple Will without having probate required.

Everyone else should give serious consideration to the use of a Living Trust or a Family Trust as the best method for avoiding the expense and delay of probate.  HERE are other reasons why so many people choose to step up to a complete Living Trust package.

A person who has minor children or wants to leave an inheritance to persons who are not yet mature enough to handle such a gift should also look seriously at the use of a Living Trust.  Under a Simple Will, the inheritance cannot be held past the time that the heir turns twenty-one years of age.  So if the inheritance needs to be held until the recipient is older and more mature — to keep it from eroding the recipient’s work ethic or being the cause of profligate spending habits — a Living Trust is the better choice.

For additional discussion of this issue, see the comments HERE.

Wit & Wisdom

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