A "living" trust (also called an "inter vivos" trust) is simply a trust you create while you're alive. The beneficiaries you name in your living trust receive the trust property when you die. You could instead use a will, but wills must go through probate—the court process that oversees the transfer of your property to your beneficiaries.
Many people create a revocable living trust as part of their estate plan. You can modify or revoke (cancel) this type of trust at any time. Typically, you'll name yourself as the "trustee" of your trust. This means that while you're alive, you retain control of the trust and its property. In your trust document, you'll also name a "successor trustee" to take over and manage the trust after you die; this person will distribute the property in the trust to your beneficiaries. (If you create a shared living trust, as is often done by married couples, then your successor trustee would assume control after both spouses have died.)
In contrast, irrevocable trusts cannot be revoked or modified after they are signed. Irrevocable trusts can be useful tools for specific goals, like reducing taxes, but they require giving up ownership and control of trust property.
When you set up a living trust to transfer your property to your loved ones after your death, you can potentially save them time, hassle, and money. Property left through a will (rather than a living trust) might be tied up for months or even years in probate court, and could involve court costs and lawyers' fees. By contrast, property left through a trust can be distributed to your beneficiaries almost immediately, and often without the need for an attorney.
Some states have fully adopted the Uniform Probate Code, a model law that streamlines the probate process, and fortunately, North Dakota is one of these states. In other words, probate in North Dakota might not be quite as cumbersome as it is in other states. In addition, North Dakota offers simplified probate processes for "small" estates:
Even if your estate doesn't meet these criteria, you could still reasonably decide that making a will rather than a living trust is sufficient because North Dakota offers a relatively streamlined probate process compared to other states. North Dakota also allows you to transfer real estate with a transfer-on-death deed, which can keep your home out of probate without using a trust. Still, there are a few other advantages of making a living trust. (See Living Trust vs. Will.)
Yes, you'll still need a will. This might seem confusing—isn't the point of a living trust to avoid needing a will? Yes, it is, and your will might never be used. But you should still write one, for one or both of the following reasons:
Probably not. But most people do not need to worry about federal estate taxes anyway because the federal estate tax is levied only on estates worth close to $12 million. North Dakota does not collect its own state estate tax.
If you have an estate worth close to $12 million (or you and your spouse or partner have a combined estate of close to $24 million), you might be able to use a more complicated trust (such as an AB trust) to reduce or avoid federal estate taxes.
To make a living trust in North Dakota, you:
You can use WillMaker & Trust to make a living trust using your computer. It has a simple interview format that allows you to complete the trust at your own pace, and it gives you lots of legal and practical help along the way. Based on your responses, the program produces a living trust document customized for you and your situation. With WillMaker & Trust, you can also make a will, powers of attorney, health care directives, transfer on death deeds, and many other useful documents. Use it just for yourself or for your entire family.
For more on North Dakota estate planning issues, see North Dakota Estate Planning.