There are a number of legal devices that are used in the field of estate planning. Depending on your unique circumstances, various different courses of action may be appropriate.
Many people assume that they should use a last will to direct future asset transfers, but in fact a revocable living trust may be a better alternative.
You may have heard about the numerous benefits of living trusts. In this blog post, we will address three of those benefits.
One of the most popular benefits of creating a living trust is avoiding probate. Assets held in a living trust are not considered part of your estate and therefore, do not need to be probated. With a last will, your will must be probated upon your death in order to administer your estate.
Probate can be expensive. Costs can vary according to the size of the estate and what assets are held in the estate. Costs include court filing fees, executor fees and attorney fees. Additional fees may also be incurred for appraisals and liquidation.
Probate can be time-consuming. Assets in probate can not be distributed immediately to the beneficiaries. In the best circumstances, probate may take months. However, some probates can take years.
Probate can lead to loss of privacy. Wills and probate are a matter of public record. Probate records include a list of assets, the value of those assets and the names of the beneficiaries. That information can be accessed by marketers, scam artists and inquisitive neighbors. Living trusts are not public matters and the administration of the living trust is kept private.
Planning for Incapacity/Avoiding Living Probate
Unlike a last will, a living trust allows you to designate a trustee to take over management of property held in your trust in accordance with your instructions in the event you become incapacitated. Without a living trust, if you are no longer able to manage your own estate, a petition for conservatorship (living probate) must be filed with the court to determine who will manage your assets on your behalf. Matters of your incompetence will be discussed in court which could be embarrassing. Additionally, your assets can be managed as the court/conservator sees fit, which may not be how you want your assets to be handled.
Providing Guidance for Beneficiaries
With a living trust, you can determine when and how your beneficiaries will receive their inheritance. If you have a spendthrift heir, you can instruct your Trustee to distribute assets to that spendthrift beneficiary on a limited basis over an extended period of time. You can also set up incentives in your living trust in order to encourage younger beneficiaries to complete vocational training or college. If you have a loved one who has had trouble with substance abuse, you can require that they participate in rehabilitation and have regular testing in order to receive money from their trust share.
Attend a Free Living Trust Seminar
If you would like to learn more about estate planning and living trusts, we invite you to attend one of our upcoming free Living Trust Seminars. To view upcoming seminars and to register, follow this link: Free Seminars and Workshops. We offer a free personal consultation to those who attend our seminars so you can discuss your personal estate planning objectives with a highly qualified and experienced attorney.
- Litherland, Kennedy & Associates Attends Exclusive Conference and Celebrates Legal Milestone - May 26, 2023
- The Joy in Joint Trusts - May 10, 2023
- The IRS’ Annual Warning: The 2023 Dirty Dozen - May 1, 2023