For some, living trusts are a better estate planning option
A living trust is a document that you create during your lifetime. It involves many parties. One is the settlor of the trust, which is always you. Another party is the person that you choose to manage your property, the trustee. Finally, the other parties are individuals or organizations who will ultimately receive your property, the beneficiaries.
A trust allows you to name yourself as the trustee, giving you complete control over your property. Additionally, you can name someone else as trustee. When this happens, the law imposes a duty on that person to manage your property according to the guidelines that you include in the trust documents.
Advantages over a will
Both a will and a living trust specify how you would like your property distributed after your death. However, a living trust also offers certain advantages that a will does not offer.
First, a trust gives you more flexibility than a will regarding how your property is distributed. In a trust, you can add provisions that specify when your beneficiaries receive your property and how they use it. For example, you can specify that you want the proceeds of your assets to be used only for educational expenses.
Secondly, one of the largest advantages of a trust is that it allows you to avoid probate. Probate is a legal proceeding for wills where a court ensures that your will is valid, your estate’s debts are paid and your property is distributed according to your will’s terms. The probate process is long and often expensive, thus decreasing the value of your estate. Trusts, on the other hand, allow you to skip the process completely. When you die, your property is distributed according to the trust document without the need for probate.
Since there is no need for probate, trusts allow you to keep your estate matters private. Probate proceedings are a matter of public record, so just about anyone can obtain information about your estate through publically available court documents. Conversely, a trust allows you to keep your estate planning affairs away from prying eyes.
Finally, since trusts are more flexible than wills, you can structure them in a way that will minimize or potentially eliminate estate taxes.
An estate planning attorney can help
A living trust is not for everyone. Whether it would be right for you depends on many factors. An experienced estate planning attorney can recommend the best way to ensure that your end-of-life decisions are conducted according to your wishes.
