What You Need to Know About Living Trusts
Navigating options for managing your estate after death are a challenge. Most people know they should have a will. However, you and anyone who inherits your assets could also benefit from a living trust. To learn whether a revocable living trust may benefit you, contact a trusted DC estate planning lawyer.
Key Differences Between a Will and Living Trust
A main difference between wills and living trusts is that a will must go through probate when you die. The probate court must validate your will before they enforce it, which can create setbacks in the distribution of assets. Another important distinction is that a will only takes effect upon death and does not protect you if you become physically or mentally incapacitated. In cases of incapacitation, the court may take control of your assets before you die.
Using a revocable living trust in your estate plan avoids these issues. This document controls your assets while you are living and after death. If you become incapacitated your Trustee can act for you and assets will remain private and not subject to court administration.
Understanding Probate in Washington, D.C.
Probate is a legal process after death. It involves proving that the will of the deceased is valid, taking inventory of assets, having them appraised, paying off debts and taxes, and distributing assets.
The D.C. Superior Court Probate Division handles probate in Washington, D.C. Your will is a legally enforceable document. During probate, the court controls the distribution of your assets, which can be costly and take months or even years to resolve.
Why You Might Want to Avoid Probate
There are several reasons you may choose a revocable living trust. One is to avoid probate, a lengthy legal process requiring payment of legal fees, executor fees, and other court costs before your assets may be distributed. If you own property in other states, it’s likely that your family would be required to file a separate probate for each of those states.
Probate typically takes months to complete and may take more than one year to conclude. The court will freeze your assets during that time so they can take inventory and appraise them. None of your assets can be given to your family or sold without the court or executor’s approval. If your family needs money to survive immediately, they must request a living allowance. It is up to the probate court to grant the allowance.
Many people may wish to avoid probate because it’s a public legal process. Any interested party can discover what you owned, which entities you owed money to, and who will receive your assets. If any extended family members are not pleased with your will, they can contest it, which may prolong the process.
Your family has no control over the steps necessary to complete probate. The probate court decides how much it will cost, how long it will take, and what information is made public.
Can I Avoid Probate in D.C. Through Joint Ownership?
Titling assets jointly may postpone probate, but there can be many negative consequences. Upon death of the first owner, the surviving owner will receive the asset without the need to go through probate. But if both owners die at the same time, the asset must go through probate. Furthermore (other than certain assets held jointly by spouses) assets held jointly are subject to the claims of creditors from either joint owner. Proper trust planning can avoid this.
Work with Cliff Cohen to Create an Effective Living Trust in D.C.
Having an estate plan that includes a living trust can save your family many complications and allows you to maintain control of your affairs while you’re still alive.
Clifford M. Cohen has more than 35 years of experience helping people navigate complex estate planning issues in the Maryland and D.C. area and dedicates his practice to constructing comprehensive estate plans and crafting effective living trusts. Find out how he can help by calling (202)-895-2799 for a free consultation or by completing our contact form.