When it comes to estate planning, people have many options for passing property down to their heirs. For example, they can create a will, a power of attorney or various types of trusts, including living trusts. But are there advantages to creating a living trust, at least for some people.
While the following information is not meant to be individual legal advice, there are some ways in which a living trust can be a good choice. For example, let's say you have real estate in two different states. In these situations, a living trust would allow the creator to only have to go through probate in the state where the person lives. That being said, according to some, the probate process in Maryland is generally not too complex.
In addition, there are times when a person's health is deteriorating or the person has other reasons for not wanting to be burdened with having to make investment decisions. A living trust can grant another person the ability to take charge of the creator's assets.
Also, if people believe that a will of theirs would be contested, they may want to consider a living trust, which is less likely to be challenged.
That being said, there are some disadvantages to having a living trust. A living trust will not lower one's taxes. In fact, in Maryland, compared to a will, the state inheritance tax may be due earlier if a person has a living trust.
In addition, creating a living trust does not necessarily cost less than creating a will, and does not necessarily save any time. In fact, in some circumstances, creating a living trust is more expensive than creating a will. This is because there are legal fees that accompany creating a living trust, as well as costs incurred when the creator of the trust transfers assets into the trust.
There are only some advantages and disadvantages with regards to living trusts. Anyone interested in living trusts would be well advised to do their research, to make sure they choose the estate planning document that is best for them.