By Jedidiah McKeehan
Before we get into the advantages and disadvantages of a living trust, let’s define exactly what we mean by the term living trust.
What is a living trust?
A living trust is a legal device people use to place their assets (property, resources, estate, holdings, goods, and other valuables) into this trust and then have a trustee manage those assets. In the state of Tennessee, a trustee can be the same person who originally owned those assets or somebody else.
What are the advantages of having a living trust?
The number one reason for people to have a living trust is to avoid going through the probate process, which can be contentious, expensive, and lengthy.
You or the trustee, and then eventually the backup trustee, will take over the management of those assets in a living trust. So if you die, those assets are already in a trust so you don’t actually own them, and therefore you don’t have to divide up your assets according to the State laws. The trust maintains ownership, which may be managed by the successor trustee.
What are the disadvantages of a living trust?
Well, living trusts are complicated.
You have to get every single asset out of your name and into the name of the living trust.
You have to pay to get the trust set up, usually through an attorney that specializes in estate planning.
And sometimes, living trusts just end up causing more of a headache. The probate process is more straightforward. Plus, people are generally more familiar with the probate process than they are with the trust process.
Deciding on whether or not to create a living trust is not one that should be taken lightly or alone. There are many resources online to aid in your decision.
Jedidiah McKeehan is an attorney practicing in Knox County and surrounding counties. He works in many areas, including criminal, personal injury, landlord-tenant, probate, and estate planning. Visit attorney-knoxville.com for more information about this legal issue and other legal issues.