One of the things that incentivizes many Minnesotans to put their estate plan in place is the wish to prevent their estate from having to go through probate. That can be a long, stressful, costly process for grieving loved ones.
With knowledgeable planning, you can ensure that your largest assets can skip probate and go directly to the intended beneficiaries. This is accomplished by placing them in a revocable living trust.
How does a revocable living trust work?
The only thing that you really need to do after you establish the trust is make sure that anything with a title or account name (like a home, car, boat or bank account) is placed in the name of the trust. You still maintain control of these assets and have access to them as the trustee while you’re still around. Your named successor trustee takes over as trustee upon your death and handles the distribution of the assets to your designated beneficiaries based on the instructions you’ve provided.
You can also list your living trust as the beneficiary for investment and retirement accounts. People often do this and then designate that all the assets inherited by the trust be divided according to their wishes.
Why you still need a will
It’s highly recommended that you have a will, even when you have a living trust. A will is where you designate things like your personal representative (often known as an executor) and your children’s guardian, if applicable.
Another reason why you should still create a will is to deal with any assets that aren’t listed in your living trust. For example, your furniture, jewelry, electronics and exercise equipment likely won’t be in your living trust. Further, you may pass away with assets that you hadn’t gotten around to placing in your living trust.
These can be dealt with by including instructions in your will to transfer all assets not in your living trust to that trust. That’s why these are often called “pour-over” wills. They “pour over” these assets so they don’t have to go through probate.
By having experienced legal guidance as you develop your estate plan, you can help ensure that you’re taking all possible steps to make things easier for your loved ones. Further, you help ensure that your wishes are clear and abide by the law so that they’ll be followed after you’re gone.