A “living trust” has become a steadily popular estate planning instrument because of the many benefits it provides. Actually, about 20 percent of Americans now have a living trust as a part of their estate plan. Maybe you think you should, too. The living trust – “revocable” trust and/ or “inter vivos” – retains the assets of the trust creator in their trust for his or her benefit throughout an individual’s lifetime. At that point, when the trust creator dies, the assets are handed over to appointed successors by the “successor trustee,” the individual that had been selected by the trust creator to do it. A living trust’s conditions can be modified at any time, or the trust can be canceled completely, which is why it is known as revocable. Why should you be interested in having a living trust in your estate plan? Benefits of a living trust include:
1. A Living Trust Stays Away from Probate
Probate is a court-monitored procedure of allocating a deceased individual’s estate. Dependent on the estate, in addition to the assets and individuals involved, probate can become a lengthy and expensive process, that might not only postpone allocations to your successors but also decreases what they are to inherit. By putting your estate in a living trust, nevertheless, you can stay away from probate because the successor trustee allocates assets in accordance with the trust creator’s guidelines without court interference. This may mean an accelerated distribution to your successors—decreasing the timeframe from months and/ or years to merely weeks—without any added expenses to the estate. Avoiding probate can be especially helpful if you are the owner of a property in another state, as your property would pass straight to your successor and not be subjected to probate in that state.
2. A Living Trust Can Save You Money
As explained above, a living trust can save money by staying away from probate expenses at your passing. Living trusts are also more likely to hold up better than a will should someone come forward to challenge the allocation, that can also save the estate money. Regarding the preliminary cost, however, preparing a living trust is potentially more costly than producing a last will and testament. A living trust is a complicated legal document that needs more actions since you are required to “fund the trust” using your assets, in other words, transferring ownership of your property to the trust. You might also want to change the beneficiary through your life insurance or 401(k) plan or IRA, each that needs individual paperwork. Living trusts might offer savings for married couples in a joint living trust fashion, but typically there is not much variance in estate and income tax savings using a living trust.
3. A Living Trust Safeguards Your Privacy
As referred to above, one of the benefits of a trust is staying away from probate. A living trust is private documentation among the parties involved and doesn’t come into the public record. Simply put, an individual cannot go and search public records later to learn more about the allocation of your estate. A will, on the contrary, is public record, so anything in it becomes public, too.
4. A Living Trust Helps Should You Become Incapacitated
If you become sick or incapacitated, the individual you have appointed as successor trustee may step in and oversee your affairs without court intervention. To this extent, you can keep clear of a court assigned conservatorship for your affairs. Furthermore, because a living trust is revocable, you can challenge the insinuation that you are incapacitated and take back control of your own affairs.
5. A Living Trust Provides Assurance and Peace of Mind
Once drawn up properly, a living trust details a clear guideline to deal with all your assets. This may help prevent you from unknowingly disinheriting someone, can assist you in offering care for a loved one that has special needs into the future, and even safeguard assets from specific individuals. All these things can provide you with peace of mind now, having the knowledge that your estate will be managed precisely as you desire later. The trust’s existence can also offer assuredness and solace to your loved ones throughout an already difficult time since you have left everything out for them.
Living Trust vs Will
In deciding what’s best for your estate— a living trust vs. a will—it is essential to accept the distinctions between them. The greatest difference is a will has no impact on your property while you’re still living and only takes effect after your passing. A huge benefit of a living trust is it won’t have to go through the probate process, as a will is required to do. However, that jointly with a living trust, you should also have a pour over will that catches any assets that have been unintentionally left out. This would guarantee that your property does not fall subject to state intestate laws, that regulate the distribution of assets that aren’t covered by a will or trust. The pour over will is required to go through the probate process. As explained above, a will provides no privacy when it becomes public record. The estate might also see a cost-savings using trust contrary to a will.
Are You Ready to Create a Living Trust?
If you have made the decision that you are ready to create a living trust, you can begin instantly by taking stock of your assets, determining who inherits what, and also thinking carefully who you will decide to be as your successor trustee. Creating a trust does not have to be time-consuming or difficult, particularly now because you can find living trust forms online to make the process easier. After answering a couple of questions, you will be right on your way to integrating a living trust in your estate plan—and to enjoy better peace of mind about your estate overall.
Need an Affordable Living Trust Lawyer in Scottsdale?
Moshier Law should be your choice when you need the best will lawyer in Scottsdale. An experienced family law attorney will work with you to obtain the best possible outcome in your situation. We advocate for our clients so they have the brightest future possible. Give us a call today at 480-999-0800 for a free consultation.
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