Understanding how living trusts work allows you to decide if it’s the best option for you. For many families in Oklahoma, avoiding probate is a major reason to consider setting up a living trust. A properly drafted and funded living trust allows you to pass property to your beneficiaries quickly, privately, and without court involvement.
What Is a Living Trust?
A living trust (also called a revocable trust) is a legal document that holds title to your property while you’re alive and provides instructions for what happens to that property when you die. You, the person who creates the trust, are known as the grantor or trustor. During your lifetime, you usually act as the trustee, meaning you retain full control over the assets.
The trust becomes “revocable” because you can change or cancel it at any time while you’re still living and mentally competent. Upon your death or incapacity, a successor trustee steps in to manage or distribute the trust property according to your instructions.
How Does a Living Trust Avoid Probate?
Probate is only necessary for assets that are titled solely in your name when you die. By placing those assets into your trust while you’re alive, they are no longer part of your probate estate. Instead, they are governed by the terms of your trust and pass directly to your chosen beneficiaries—without going through the court.
For example, if your home, bank accounts, and investments are titled in the name of your living trust, they can be transferred immediately by your successor trustee without waiting for court approval.
What Assets Can You Place in a Living Trust?
You can transfer almost any type of asset into a living trust, including:
- Real estate (homes, rental properties, land)
- Bank accounts and CDs
- Investment accounts
- Business interests
- Personal property and valuable collections
To fully avoid probate, you must fund the trust—meaning you must legally transfer ownership of each asset into the trust. This often requires new deeds, retitled accounts, or updated beneficiary designations.
What Happens If You Don’t Use a Living Trust?
If you die without a trust and your estate includes real estate or other significant assets, your heirs will likely have to go through the probate process. This involves:
- Filing a petition in district court
- Notifying heirs and creditors
- Inventorying your assets
- Paying debts and taxes
- Waiting months before distributing property
In contrast, a living trust allows for faster distribution, less court involvement, and greater privacy.
Can You Still Use a Will With a Living Trust?
Many people create a “pour-over will” to work alongside their living trust. A pour-over will directs any assets that weren’t in the trust before your death to “pour over” into the trust after probate. This acts as a backup, but it doesn’t eliminate the need to properly fund your trust ahead of time.
Living Trusts vs. Other Probate Avoidance Tools
While there are other probate avoidance tools available—like joint tenancy, payable-on-death accounts, or transfer-on-death deeds—these options are limited in scope. A living trust provides comprehensive control, asset protection, and a full estate plan in one document.
Wagoner Estate Planning Attorneys
Understanding how living trusts work and creating one involves more than just filling out a form. You need a carefully tailored legal document and guidance on properly funding the trust. Call our team of estate planning attorneys at Kania Law – Wagoner Attorneys at 918-283-7394 for a free consultation. Or you can follow this link to ask a free online legal question.
