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If there’s no power of attorney or financial institutions won’t accept it, the courts become involved. If you become disabled, whoever holds your power of attorney has to present it to financial institutions and have them accept it before your assets can be managed. The probate court supervises the process. Eventually it passes to the final beneficiaries. When you use a will, however, after you pass away title to property passes from you to the estate and its executor. After you pass away, the trust property is managed and distributed according to the terms of the trust.
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If you become disabled or pass away, the successor trustee, or trustees, you named in the trust agreement automatically takes over management of the property. With a trust you initially serve as trustee and manage the property. They say people know when a will needs to be updated but often incorrectly believe a trust doesn’t need to be revisited.Ī living trust at least theoretically provides for a smoother transition of management and ownership of property. Some attorneys believe trusts are less likely to be updated. A will usually is less expensive to have prepared than a trust. So, the trusts have no value.Ĭost is a consideration. Many people have trusts drafted but then don’t transfer legal title of their property to the trusts. Names on financial accounts might have to be changed. Titles to vehicles and some other assets have to be reissued. That means deeds to real estate must be reissued in the trust’s name.
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Be sure to name the trust as legal owner of property and manage it as the trustee. With a trust, you have to follow the legal formalities of the trust. Anything you own at your passing automatically is included in your estate. Some people think using primarily a will instead of a living trust is more efficient over the long term, because it is easy to transfer assets in or out of your estate when they are owned in your name. Also, the rules for challenging wills are well-established, while there is less law concerning challenges to trusts. Trusts rarely are challenged, partly because their details aren’t public. Yet, some people believe the public scrutiny is an advantage, because it provides checks and balances.Ī will is more likely to be challenged than a trust. The will is filed with a court and is available to the public.