Living Trusts Offer You Privacy With Your Estate
I frequently have clients who ask about the various estate planning tools that are available to them, and one of my most common suggestions is to use a living trust. There are many benefits associated with living trusts, one of the biggest being the privacy they offer your estate.
Here is some information about trust privacy and why it’s beneficial to you and your loved ones.
The public nature of wills
Wills are extremely useful estate planning tools, but one of their primary drawbacks is their public nature. While you can keep all of your estate planning documents private during your life, that’s not necessarily the case after your death. Wills, for example, must be filed with the local probate court after your passing, even if there won’t be any actual probate court proceedings related to your estate.
Once the will passes through probate court, it is on the public record, meaning anyone who wishes to read it and learn about its contents can do so. This is how people are able to find out what’s in a celebrity’s will so quickly after he or she dies—as soon as a family member or estate administrator files the will with the court, it’s available for all to see.
While the general public will likely not take an interest in your will, there’s nothing to stop anyone from finding out what’s in it.
Trust privacy
A living trust, on the other hand, does not have to be filed with the probate court at any time before or after your death. The probate court also has no role in overseeing your trustee, who handles the distribution of the assets you place in your trust.
Instead, your trustee is bound by the instructions you create in the trust document, and does not need to seek permission or approval from the court to carry out your wishes.
As a result, the contents of your trust remain private. This can help you avoid disputes about how you choose to pass down assets after your death, and can prevent any unwanted prying from people outside your family or your close circle of friends.
There are, however, several limitations to keep in mind. Your trust will not be able to keep the following details private:
- The trust’s terms: If you use a living trust, your trustee must provide a copy to the beneficiaries after your death, if they request one. In California, you must provide the entire, “true” copy of the trust to beneficiaries who request it.
- Ownership of real estate: Real estate ownership is always a matter of public record. So while who you leave your real estate property to through your trust will be private in the sense that others can’t access the trust document, people will eventually be able to find out who took over ownership of the property by accessing local records.
- Lawsuits: If someone files a lawsuit over your estate after your passing, there’s a chance the trust document will become part of the lawsuit’s public record. These lawsuits are rare, and you can help prevent them by being upfront with your heirs about what they can expect with regard to their inheritance.
Follow the Speedwell Blog HERE.
Schedule Your Consultation with Our Alexandria Estate Planning Attorney
Misha Gill is an Alexandria estate planning attorney for his firm, Speedwell Law, PLLC. If you would like assistance in setting up your own will, living trust, and other estate planning documents, Misha can be reached at (703) 553-2577 or [email protected].
This post, including any of its contents or links, is not intended to provide you with legal advice. It provides personal perspectives on legal news and developments. Reading this post, leaving a comment, or communicating with its author by email or over the Internet does not create any attorney-client relationship.