Most people understand the benefits of having a written legal document that will guide the distribution of their assets upon their death. However, this doesn’t answer one of the most important questions: is a living trust the right choice for you and your loved ones?
Some individuals assume that a will is their only option. This is what they’re most familiar with, so this is what they use. Even if you decide to go down this path, it’s still a good idea to first learn more about a living trust.
AARP shares this basic definition of a revocable living trust (one of the most common types):
“A revocable living trust is a written agreement designating someone to be responsible for managing your property, It’s called a living trust because it’s established while you’re alive. It’s “revocable” because, as long as you’re mentally competent, you can change or dissolve the trust at any time at your own discretion for any reason. Typically, a living trust becomes irrevocable (cannot be changed) when you die.”
There is a lot to know about living trusts, including the many benefits. Here are three of the top reasons why this is something to consider:
Are you concerned that your estate will go through probate upon your death? With a will, this is a definite.
A living trust is a bit different, as it is not subject to the probate process. This means many things, including the fact that your assets will be distributed in a more timely manner to your heirs.
Your trustee will pay your debts, take care of any final obligations, and then distribute your assets as outlined by the trust.
Save Your Estate Money
Don’t shy away from a living trust because you’re worried about how much it will cost to create this legal document. Yes, it is likely to cost more to setup than a will. Even so, you need to look into the future.
A living trust can save your estate money at the time of your death, due to the fact that your assets will not go through probate.
A living trust is not the right financial decision for everyone who is creating an estate plan, but it’s something you should at least consider. You won’t know if it’s right for you until you learn more about the financial implications it will have.
Do you consider yourself a private person? Do you want this to continue even after you have passed on?
One of the primary differences between a will and a living trust is the level of privacy. A will becomes public record after you pass, meaning that all transactions associated with it become public as well.
A living trust is not made public, which allows your estate to be distributed in a private manner.
This is a matter of preference. There are those who don’t care what others know after they pass on. And then there are those who would rather keep the estate distribution process as private as possible.
How to Create a Living Trust
Now that you understand the benefits of living trusts, you need to make a final decision. Is this right for you? Are you better off avoiding this for the time being?
If you decide to create a living trust, the best thing you can do is consult with an experienced estate planning attorney.
Upon doing so, your attorney can discuss details such as:
- The many types of living trusts.
- The cost of creating this legal document.
- The assets that you want to move into the trust.
- How to choose a trustee.
- What will happen during the trust administration process.
These are all things that you need to talk about, so be sure to let your attorney guide you during the creation of a trust
If you have any questions about living trusts, we’re available to provide the guidance you require. At our law firm, we’ve helped many people with this detail of their estate plan.
We know you’re faced with many questions and challenges, so don’t hesitate to contact us when you need assistance. You can be rest assured that we’ll point you in the right direction.
- The Toll of Serving as Fiduciary - May 11, 2022
- Just When You Thought You Understood the 10-Year Rule, Think Again - May 5, 2022
- Business Succession Planning May Be Easier than You Think - May 2, 2022