In the event that you don't know what a Living Trust is, you should read this post. I've been meaning to set one up for myself for a while and even attended a seminar about living trusts about two years ago, but never got around to it.
Lars convinced me I needed to look at it again, so we went to another seminar this past Tuesday.
The idea behind a Living Trust, is to make it easier on those who are left behind when you die. Without a Living Trust, anyone with more than $100k in assets and/or more than $20k in real estate is subject to probate in the event of a person's death.
Probate is what Living Trusts help you avoid. Probate takes time (averages about 6 months to a year), takes money (reduces the amount you leave to the survivors, since you have to pay lawyer fees, trustee fees, and other fees), and prevents distribution of your assets in a timely manner (money only goes to a beneficiary after a judge okays it).
If you aren't completely asleep by now, you should know the easiest way to avoid probate if you have assets is to create a Living Trust. With a Living Trust, all assets pass directly to the beneficiary(ies) designated, bypassing probate.
Setting up a Living Trust takes time, paperwork, and adds an additional step every time you buy property, sell property, open an account, etc (you transact in the name of the trust rather than your own name). but it's worth in the long run to secure your family's well being. For married couples there are added benefits in Living Trusts as well, giving huge tax breaks when one spouse or the other passes away.
So if I haven't convinced you to examine Living Trusts, hopefully, I've made you think a little about estate preservation, and what happens should you pass away.
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