Writing a will is a very old practice. Are you planning to do it following the footsteps of your deceased father? Wait, of course, it is good that you do not want your children to face legal issues after you pass away. But, as against a will, you should consider Living Trust. What are they, and how can they be beneficial? Read on to learn more:
What Is a Living Trust?
You know that a will is a legal document. In the same way, living trusts are also legal documents. Like a will, you will create it in your lifetime. Similar to a will, this document will spell out what exactly your desires are concerning your assets and properties after your life.
How Is It Different From a will?
Now, you know that living trusts are similar to wills. But, how are living trusts better and beneficial and how are they different from wills?
The key difference is that a will that you write now will get into play only after your death. A will can come into action once it has entered into probate. But, the good thing about a living trust is that it bypasses the time-consuming and costly probate process. In turn, it will enable your successor trustee to implement your instructions as you have documented in your living trust after you pass away. Here, the successor trustee will play a similar role as an executor does for a will. Even the successor trustee can execute your instructions if you are not in a position to manage your legal affairs, healthcare, and finances due to age and other factors.
Who Is Who In Living Trusts?
Living trusts are also referred to as revocable trusts or revocable living trusts. This document establishes a trust for any assets that you wish to transfer. The key role of this document is to oversee the transfer of your possessions after you pass away.
According to the terms of this trust, you to whom the property belongs is the grantor of the trust. Also, the person, whom you choose to distribute the possessions on your behalf after you pass away, is called the successor trustee.
Who Should Opt For Living Trusts?
Opting for living trusts is a good idea for any person with complex personal or financial situations like property in other states, closely-held business interests, a blended family, and considerable assets.
So, if your situation prevents you from trusting your personal judgment and knowledge, you can rely on a qualified state planning attorney who can draft living trusts for you. Of course, you will have to spend money on hiring an expert. However, you can feel satisfied and confident that your final wishes will be rightly carried forward.
Living trusts are excellent tools in the case of unmarried people. Irrespective of the financial situation of such a person, if he feels that his desires cannot be fulfilled by using beneficiary designations, he can benefit from living trusts.
What Are the Steps Involved in Establishing a Living Trust?
Living trusts follow the steps listed below:
- Let us consider that you are creating a living trust. Then, you will be called a settlor or a grantor. You will be transferring the ownership of your property and other assets to the living trust that you create. For instance, you have the option to place the name of the trust on your vehicle title or property deed. The trust fund is created by the items in the trust jointly.
- The second step is that you will appoint a trustee. This person should manage the trust in the best interest of the beneficiaries. So, you have the option to appoint either one of your relatives or the trustee, or even you can hire a professional trustee. You can get these professionals from financial institutions. Irrespective of the person you appoint, the trustee should follow the instructions of the trust.
- In the event of your demise, the trustee should deal with your assets as per your wishes outlined in the trust agreement. As against a will, the living trust does not need to clear the courts on your demise or turn out to be incapacitated to get to the intended beneficiaries.
As a grantor, you have the option to leave a complete inheritance to your heirs. You can choose them to be the beneficiaries of a living trust. Otherwise, you can also add a particular condition for the beneficiaries to meet before they can get items in the inheritance. For instance, you can state that your grandchild can get a particular asset like a vehicle on the completion of his college.
Why Choose Living Trusts?
Here are some benefits you can expect from living trusts, thereby making it an ideal choice:
Get More Privacy Protection:
As compared to a will, living trusts offer better privacy protection. For instance, when it comes to the former, anyone can obtain this legal record after the death of a person. Nevertheless, a living trust is entirely private. Unless your trustee shares, no one can get to know the details of living trusts.
Provides Protection if Challenged:
As compared to a will, it is hard for a potential challenger to challenge living trusts. When a person thinks about successfully challenging a living trust, he will have to prove that the grantor was forced into signing the living trust document.
Saving Time and Money:
As against a will, a living trust will not have to go through the probate process. Your trustee can take care of your end-of-the-life affairs like distribution of assets to beneficiaries and funeral costs. The trustee can do these things without having to wait for the decision of a probate judge. Even, this arrangement helps with cutting down the costs as well.
In short, living trusts are beneficial in many ways as compared to a will. As your Estate Planning & Probate Attorney, we can take care of this process successfully for you.