Aside from ensuring that one has enough resources to provide for themself for the rest of their life, most people want to leave their loved ones in the best financial position upon their passing. Better put, most people want to ensure that their estate can pass to their beneficiaries in the quickest, most cost-efficient manner. Although there are many options when it comes to estate planning, one thing is clear; a living trust is the best option to accomplish this goal.

A living trust is a legal document that enables you to hold assets during your lifetime. Although a trust’s primary purpose is to manage your estate for your benefit during your lifetime, even upon your incapacity, a trust will also set forth how your assets will be administered and distributed upon your passing. Importantly, assets that are titled in the name of your trust do not need to go through the probate court process. Instead, the person designated as your successor Trustee can immediately gain access to your trust assets and begin paying final creditors and distributing your estate pursuant to your desires. 

Conversely, a Last Will and Testament is a legal document that only becomes effective upon your death. Although a Will accomplishes the goal of dictating who will be in charge of gathering your assets and distributing them to your designated beneficiaries similarly to a trust, a Will only becomes valid when it is admitted to probate. Probate is the legal process that is required in order for your personal representative to gain access to your assets and ultimately distribute your estate to your beneficiaries.

In Nevada, a typical probate takes approximately 9-12 months. Additional factors, including the sale of real property, can lengthen this time period even more. Aside from the time involved, a probate is much more expensive than a trust administration. For instance, attorneys are entitled to a fee for services rendered in administering a probate estate. The fee associated with such administration is determined by statute based on a percentage value of the size of the decedent’s estate. By way of illustration, an estate with a gross value of $500,000 can result in legal fees, exclusive of costs, in the approximate amount of $13,000 under current laws. Said amount only increases with the value of the decedent’s estate, all of which could have been distributed to your beneficiaries and avoided with a revocable living Trust. Thus, although both a Trust and a Will direct management of your estate upon your passing, they are not created equally when it comes to the impact on your family and/or beneficiaries upon your passing. 

In addition to the time and expense associated with probate, a properly established estate plan can avoid the need for court involvement during your lifetime. Because a trust is effective immediately upon its execution, a trust also provides you protection during periods of incapacity. Instead of requiring your loved ones to obtain a time consuming and expensive guardianship when you are no longer able to make your own decisions, a trust allows your successor trustee to step in and immediately manage your estate without court intervention. When combined with the appropriate powers of attorney for financial and health care decisions, the goal is to never end up in Court.

Estate planning is a critical step in ensuring the financial future of not only yourself, but also your loved ones. Taking the steps to create a living trust now will ensure your wishes are followed without the time and expense being placed on your family later.  The attorneys at Allison MacKenzie, Ltd., are experienced and trained in estate planning.

See the full article on Page 5 of Smart Money here.