Because the financial responsibility of the Christian is to exercise wise stewardship over the assets God entrusts to his care, it is important to look at a good alternative to the Last Will and Testament which normally has been considered to be our last opportunity to be a good steward. The Will (an adequate method of distributing your assets according to your wishes) only becomes effective upon death, and must be probated (settlement of estate through the probate court).
The Living Trust is a less well known method of estate planning that can provide all the benefits of the Will, and in addition:
- Is immediately effective to control all the assets in the trust.
The Living Trust holds the title to all property placed in it, but the person who is named as the “trustee” (normally the one who used to hold the title) has control of the property to do all that the owner could do.
- Eliminates the need for probate of the estate to include its costs, attorney’s fees, and its time consuming agony.
Because the property is now titled to the Living Trust, there is nothing on the former owner’s estate to probate. Therefore, the normal probate costs are saved, the need to hire an attorney for probate and his fee is eliminated, and the up to two years probate process is avoided altogether (heirs receive their assets sooner).
- Can minimize and perhaps eliminate the estate and inheritance taxes on an estate.
Estate and inheritance taxes are “death” taxes paid for the priviledge of distributing and inheriting assets. Proper estate planning with Living Trusts can definitely shield $600.00 per spouse in estate taxes and perhaps more.
- Is a private document, rather than a public document open to anyone.
A Living Trust document is not required to be published (unlike the Will on the death of the maker of the Will), nor is there a requirement to resort to the courts for authority to handle the business of the estate.
- Can be revoked, allowing you to change your mind at any time.
- Can eliminate Will contests and efforts to overturn your wishes.
Contesting a Will is rather easy because of the need to publicly publish the probate process and contact all the heirs whether they are inheriting or not. Because the Living Trust is private, the trustee can make all the distributions without anyone knowing who doesn’t need to know.
- Speeds up the distribution of assets to your heirs.
- Is effective in dealing with catastrophe illness and incapacitation during life (unlike the Will).
The trustee or successor trustee can continue to manage the assets of an injured or incapacitated person without the need to seek court permission. A Will only deals with an estate at death and is not effective to deal with illness.
Those who desire to be good stewards should consider a Last Will and Testament or Living Trust as a necessary first step in estate planning. The Living Trust is somewhat more expensive, but much more flexible and cost reducing in the long run than the Will. See your local Christian attorney about details. Make sure they have experience with Living Trust before actually retaining their service.
Dr. LeRoy Randolph