Do Living Trusts Help Prevent Family Disputes?

A living trust, also described as a revocable trust, is a popular estate planning tool that allows you to bypass probate, maintain privacy, and keep a higher level of control over your assets after you pass. Moreover, a skilled living trust attorney can help you set up a trust in a way that preserves peace in the family. Let’s explain how this works. 

What Is a Living Trust?

A trust is an entity that can hold assets like money, real estate, valuables, and vehicles. Every trust includes three parties:

• The grantor, or trust creator
• The trustee, or trust manager
• A beneficiary or multiple beneficiaries

When you set up a living trust, you can act as the grantor, trustee, and beneficiary. In this case, you would be able to keep using your assets as usual during your lifetime. You’ll also determine what happens to trust property upon your death, such as the distribution of assets to beneficiaries. You would need to appoint a successor trustee who takes over trust management once you pass away or become incapacitated. 

A living trust remains revocable for as long as you live. Thus, you can relatively easily amend the trust document, update your list of beneficiaries, or transfer assets to and from the trust. The trust becomes irrevocable upon your death. 

The Benefits of a Living Trust

One frequent question people ask a living trust attorney is, “I already have a will. Do I also need a living trust?” While a will alone may be enough for small estates, there are many benefits to setting up a living trust, namely:

• Probate avoidance. A living trust can help your family skip the mess and cost of probate, which usually takes 12 to 18 months in California.
• Privacy. While probate goes on public record, trust information stays private.
• Control. Living trusts are highly flexible, allowing you to set asset management and distribution terms. 
• Continuity. A successor trustee can step into your shoes and start managing trust assets immediately without waiting for a court order. 

How Living Trusts Can Help Prevent Family Conflicts

Inheritance disputes have destroyed many family relationships forever. Living trusts can help avoid this type of horror scenario in several ways.

Avoid Confusion

Trust documents are highly flexible so that you can specify your wishes regarding the distribution of trust assets. For example, you may stipulate that an adult child will receive their inheritance when they graduate from college or reach a certain age or limit a guardian’s power to make financial decisions on behalf of minor children. With a plan in place, there’s less room for conflict. 

No-Contest Clause

Maybe you expect that a certain family member will challenge your trust and possibly harm the interest of other beneficiaries. You can prevent this by including a no-contest clause, which states that any beneficiary who contests the trust loses their right to any bequest. 

A Competent Trustee

Appointing a competent person to manage trust assets after your death can prevent conflict. Your trustee will have the legal power to carry out your wishes, which would also make it easier for them to mediate any disputes. You can also name co-executors, in the event you prefer to name two people to help. You may also wish to consider an independent trustee. 

Law Offices of Alice A. Salvo: Smart Estate Planning and Asset Protection in Woodland Hills, CA

Contact the Law Offices of Alice A. Salvo for strategic estate planning that helps preserve your legacy, provide for your loved ones, and protect family relationships. Call 818-676-9572 or fill out our online form to consult a dedicated Los Angeles living trust attorney.