Living trusts can serve as an important inclusion in an individual’s estate planning efforts. These resources are distinct from the traditional “last will and testament” that many are familiar with, and that serve as the alternative foundational document in many adults’ estate plans.
If you live in Tennessee, understanding that drafting this resource might be more advantageous than crafting a will alone can guide you in making informed decisions about managing your legacy as effectively as possible in anticipation of your eventual passing.
What is a living trust?
A living trust, specifically a revocable living trust, is a legal resource created during an individual’s lifetime that allows them to manage and access the assets placed within the trust until their death. Upon their death, the assets are transferred to designated beneficiaries by a chosen trustee.
Advantages and limitations of drafting a living trust in Tennessee
The primary advantage of a living trust is the fact that it can bypass the probate process, which is almost always an issue when a testator opts to transfer assets via a will. Probate can be time-consuming and costly in Tennessee, and it also makes the financial affairs of the deceased a matter of public record. A living trust offers a smoother and more private transition of assets. And, just like a will, the terms of this arrangement can be changed or dissolved at any time.
With all of this said, it’s worth clarifying that establishing a living trust generally involves higher initial costs and more complexity than drafting a will. The process requires transferring property into the trust through title changes, which can be a complex undertaking. Additionally, unlike a will, which is a static document unless it is updated, a trust requires ongoing management. For those who prefer a “set-it-and-forget-it” approach, the continuous oversight required for a trust might be seen as a disadvantage.
Making a decision
For individuals with straightforward estates or fewer assets, a will may be a more appropriate and cost-effective tool. Wills are simpler to create and can adequately handle the direct transfer of assets, though they do not avoid probate. As such, for most adults in Tennessee, a living trust is a smart investment of effort.
Either way, given the complexities involved in choosing the right estate planning strategy – and all that is at stake in doing so – it’s important to remember that seeking personalized feedback about this decision is always an option.