During the estate planning process, many questions may come to the forefront. For example, you need to answer the following: does a living trust make sense for somebody in my position?
Before you can answer this question, you need to learn more about living trusts. This includes everything from the benefits to the creation process and much more. You don’t want to leave a single stone unturned, as this could come back to haunt your loved ones in the future.
Generally speaking, a living trust is nothing more than a legal document through which your assets are placed into a trust. Since this is done while you are living, you are in charge of the assets that are transferred into the trust.
Once you pass on, however, the assets are then transferred to your beneficiaries by the person you name as the successor trustee.
While this sounds straightforward, there are many details to consider and questions to answer. Just as important, you need to know why it’s a good idea to create a living trust as opposed to simply relying on other forms of estate planning.
Here are three reasons to create a living trust today:
- To Help Your Family Avoid Probate
One of the primary benefits of a living trust is that it helps your family avoid the probate process. This is a big deal for many reasons, including the fact that probate is costly and time consuming.
If you only have a will, your estate will go through probate. There is no way around this.
With a living trust, however, you don’t have to concern yourself with this. You know that your family can avoid probate, which means they will receive your assets faster.
Note: you have the right to choose a guardian for minor children through a living trust.
- It Can Save You Money
This depends largely on your financial situation, but it is something to consider.
Upfront you will spend more money creating a living trust than a will. Along with this, you are required to transfer assets into the trust. This all takes time and money, but don’t let it scare you away.
Despite the higher upfront costs, a living trust will save your estate money once you are gone. Court costs for probate are nothing to take lightly. Taking this one step further, a living trust has a better chance of holding up in court than a will. You may not think somebody will contest your estate plan, but you never know what could happen.
- Privacy
Are you a private person? If so, you definitely want to consider the difference between a living trust and a will. Upon your death, a will is public record. This means anybody can see what you left behind and who will receive the property.
With a living trust, this is not true. Instead, this type of legal document is not made public upon your death. This means that your estate, any assets being held in the living trust, will be distributed in private.
Final benefit: you can create a living trust so that your trustee is able to take over your affairs if you become incapacitated. This is just another thing that will give you peace of mind.
Is a living trust right for everybody? Of course not. There are people who realize this is just what they need. There are also people who realize that they are better off with nothing more than a will for the time being.
You need to take this information and then decide if a living trust is something to consider.
Are you ready to create a living trust? If so, it is safe to assume you will have a few questions. For this reason, you need to download our report entitled “Dangers of Do-It-Yourself Wills and Living Trusts.”
It is easy to believe you can create a living trust on your own, but there are many dangers lurking. If you don’t make the right decisions, if you make any mistakes, you could end up complicating your situation now and for your loved ones when you pass on.
A living trust is a good thing, just as long as you create this legal document in the appropriate manner.
- The Questions of Estate Planning, Part 6: Why - January 6, 2020
- The Questions of Estate Planning, Part 5: How - January 2, 2020
- The Questions of Estate Planning, Part 4: Where - December 30, 2019
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