Advantages of a Living Trust

Video Transcript

"There are two big advantages of a living trust. The first big advantage is that a living trust, if it's done correctly, will allow you to avoid the need to use a power of attorney if you're incapacitated. The second big advantage of a living trust is it allows your family to avoid probate if you pass away or when you pass away. So let's go back to the first one, disability and powers of attorney. If you become incapacitated, with a living trust, if your assets are owned by the trust, which is a key ingredient to a living trust, then whoever the trustee is can manage your assets for you, distribute them for your behalf, make sure you're taken care of. Disability planning is a huge part of estate planning. Having a living trust enhances greatly your family's ability to take care of your assets and take care of you if you're incapacitated. The second big advantage of a living trust, as I said earlier, is you can avoid the probate process. The problem with probate are three. First, cost. Second, delay. Third, privacy. With the will, you're going through probate. With the living trust, you can avoid probate because what happens with the trust is you pass away, you don't own the assets. The trust owns the assets. The trust says if I can't be the trustee anymore because I passed away, my spouse can, my child can, my friend can. They take the assets that I own when I die, they distribute them to my loved ones the way the trust says. By the trust owning it instead of me owning it, we avoid the probate process, we avoid costs, we avoid delay, and we can keep everything private."