Why a Living Trust May Be the Smartest Move for Your Estate
Do you (or your parents) need a living trust? The answer is “perhaps.” This article is to help you decide whether to make a living trust or not. Estate planning can sometimes feel overwhelming, but most trusts are less complicated than you may think and can save your loved ones a lot of money.
Avoid the Probate Process Entirely
Avoiding “Probate” is the biggest reason to include a living trust in your estate plan. Probate is a legal nightmare. Probate is the court-supervised process of distributing a deceased person’s estate, and it can cost both time and money from start to finish. Depending on the size of your estate and where you live, the probate process can be long and expensive.
Probate can take more time to complete than the distribution of property held in a living trust. During the probate process, assets tied up in probate may not be as readily accessible to the beneficiaries (e.g., the children) as those held in a living trust. The process can take upwards of a couple of years to complete and can eat up tens of thousands of dollars.
Choosing the Right Trustee for Your Family
A living trust avoids probate. It’s a legal document that can own things. Your assets are “funded” into your trust for your benefit during your lifetime, and then transferred to your chosen beneficiaries at your death by the person you have designated as your “successor trustee. A trusted child can be a good choice, although sometimes choosing one child over another can cause hurt feelings.
Choosing an executor who won’t cause your children to bicker, argue, or squabble would be wise. If you anticipate strife among your heirs, a child may not be the best choice. Instead of choosing a child, it may be better to select a trusted friend. A trusted friend (or relative) who will not inherit under the will may be a better option since he or she would have no conflict of interest.
Living Trusts Are Private—Unlike Wills
Another advantage of a living trust is that it is a private document that never becomes part of the public record in the way that a will does. This means that any transfers of assets made through a living trust remain confidential among the parties involved, and no one can do a search to find out what you left to whom through the trust.
Control How and When Inheritance Is Distributed
A trust gives you greater control over how and when your assets are distributed to your beneficiaries. In your trust document, you can outline specific terms, so your property is handled exactly how you want it to be after you pass away. For example, if your beneficiary is a minor child, you might want them to be a certain age to be sure they don’t spend their inheritance irresponsibly or all at once.
Flexibility to Update as Life Changes
Revocable living trusts are also flexible. If your estate planning goals, circumstances, or even the people in your life change, you can easily make an amendment to your living trust. Understanding the benefits of a living trust should help you decide if a trust is right for your needs. If you’re still young and really don’t own anything, you probably don’t need a living trust.
Do You or Your Parents Need a Living Trust?
However, your parents might need a trust to keep you (and your siblings) out of probate court. Bottom line – if you or your parents own your own home (paid for or not), you (or they) need a living trust. Why share your inheritance with high probate attorney fees and court fees? Have your parents to talk to an estate planning attorney to see if a living trust makes any sense for them.
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