You may hear from family and friends that you should do a Living Trust, but you don’t know what the benefits of having one are. Read now to learn about the top 5 benefits of having a Living Trust!
When you’re creating the elements of your estate plan, one important thing to consider is how your assets will be transferred to beneficiaries after you’re gone. While most people just rely on a will to dictate the disbursement of their assets, some people are turning to living trusts.
Living trusts can offer a number of benefits for you and your heirs. Here’s a quick look at what a trust is and why it might be a good addition to your estate plan.
WHAT IS A LIVING TRUST?
A living trust is a legal document that holds your assets while you are alive. Upon your death, the assets in the trust can be transferred to a named beneficiary by the person or organization in charge of the trust (called a “successor trustee”).
There are different kinds of living trusts. A revocable living trust is one that it is flexible. It can be changed at any time during your lifetime, as well as cancelled, so you are able to alter the terms of the trust as you see fit. An irrevocable living trust is not flexible. Once it is created and assets are placed in it, it cannot be revoked.
5 BENEFITS OF A LIVING TRUST
There are numerous reasons people choose to incorporate trusts into their estate plans. Here are a few of the main benefits a living trust can offer.
Helps you avoid probate
Probate is a court-run process through which your assets are distributed. Unfortunately, probate court can be lengthy and come with an assortment of fees. Assets placed in a living trust avoid probate and are passed down directly to the beneficiaries. This makes the inheritance process much faster and simpler for all parties. It can also prevent the costs of probate from being taken from your estate, which could reduce the assets your beneficiaries receive.
Keeps your documents private
The items in your will are subject to become part of the public record, meaning people outside of your family can learn the details of your estate after probate court. Living trusts are private, so no one outside of your beneficiaries can discover their details.
Customize your distribution
Many people worry about what their heirs will do with the assets they leave them upon their death. Through a living trust, you can specify distributions for minor children or other beneficiaries based on certain factors. For example, the trust may hold a child’s assets until they turn 21. Or, you can specify that fund disbursements be made to a family member with disabilities on a monthly basis to provide them with ongoing support.
Revocable living trusts are able to be changed over time to account for changes in your family or estate. This gives you the flexibility to make adjustments to your beneficiaries and the assets they receive.
Protects assets during your lifetime
Should you become incapacitated and are no longer able to care for your own estate, a trust allows the successor trustee to take over the management of your affairs. Without this, there may be a court-appointed process to determine a guardianship or conservatorship over your assets.
Ready to create a Living Trust?
Living trusts are not right for everyone, but they can be beneficial for many people. To learn more about how a living trust might fit into your estate plan, contact the Orange County estate planning attorneys at Amity Law Group. To schedule your free consultation, contact us.