In the recent Hollywood hit movie, Inception, Leonardo DiCaprio plays a corporate espionage thief who extracts information from subjects while they are dreaming. DiCaprio and his crew of thieves are hired to plant an idea in the mind of an heir to the world’s most powerful energy company. The spies seek to coax the heir into believing his father wants him to break-up the father’s vast energy empire. The flaw in Inception is that the dying patriarch of the energy giant sets forth his wishes in a last will and testament. The average business owner or an energy titan owner would not hold business interests outside of a trust or set forth his dispositive wishes in a will.
A trust serves many valuable functions; it is not just for business owners (or, the wealthy). A few reasons why you should consider putting your assets in a trust:
- Provide Financial Management of your Property – You may act as trustee at first and later decide you no longer wish to do so. A trustee or successor trustee you’ve selected can take over the day-to-day property management.
- Provide Property Management if you can’t manage your affairs – If you become too ill or disabled to manage your property, your trustee or successor trustee will do this for you. With no trust in place, you would need a guardianship (or, conservatorship outside of Nevada). You can avoid the trouble and expense of setting up such arrangements if you have a living trust.
- Avoid Probate – Property in your revocable living trust doesn’t go through probate after your death. However, if you fail to title property in the name of the trust, those assets will have to pass through probate.
- Quick Distribution to Beneficiaries – This is another advantage of avoiding probate. The probate process delays property distribution. With a trust, your trustee can distribute property to your beneficiaries sooner.
A trust does not eliminate the need for a will. You may have property that never gets transferred to your trust. A will can act as a backstop to transfer any property to your trust. However, if you happen to own the world’s largest energy company, you should definitely have a trust.