Now we all know that estate planning is vital in every body’s lives. It helps you to create a strategy that will transfer your property and wealth to your beneficiaries after your demise. If you don’t do proper planning before your death, then there are high chances that your heirs will lose a big part of your property to taxes.
We all also know that a probate case can be challenging to handle and a lengthy process. It can be expensive if your state doesn’t have probate-friendly laws. Setting up a living trust with an estate planning lawyer can be an excellent way to ensure a faster and less expensive distribution of your assets to your heirs.
What Is A Living Trust In Estate Planning
A living trust is a tool that can help you to save inherent taxes and avoid probate. To put it in simple words, a trust is a document that lets a person known as trustee manage the assets of the owner. It also includes the names of beneficiaries that will get the property and assets after the death of an individual.
According to the law, the person who makes the living trust can name anyone as the trustee. Many people also prefer to choose a trusted company or bank for this role. You can include all your assets and property into the trust. It can be your stocks, bank accounts, bonds, stocks and other assets. When you transfer your property into the trust, it means that it doesn’t belong to you. Hence, it will ensure that your family members do not have to have a probate case. However, you will still control all your assets until you are alive.
Estate Planning: How To Set Up A Living Trust
Anyone can set up their living trust as the process is not too complicated. However, you must not miss taking help from the estate planning lawyer to get all the work done correctly. The first process of creating trust involves a written agreement. In the deal, you have to name three people that are the maker of the trust, the trustee, and the beneficiaries. Once you form the living trust, you have to dictate what happens to the assets.
The best thing about living trust is that you can modify it later according to the circumstances. After putting the assets into the trust, you have to mention about beneficiaries. In the agreement, you have to describe the share of every heir after your demise. Income earned through the assets of the trust will come to you.
Advantages Of Living Trust During Estate Planning
There are a lot of advantages of creating a living trust for yourself and your family members.
Changeable And Flexible
Another impressive thing about living trust is that it is entirely flexible. It lets you make amendments in the trust according to the circumstances. Therefore, you can even build trust, even when you are young.
You Can Avoid The Probate Process
So, we all know that probate is a legal process. It is where our estate gets used to pay off the debts, and the remaining gets transferred to the heirs. In the whole process, you will need to present all your assets and documents to the public eye. This process can also be expensive if you have properties in other states. This is where we can avoid probate case if we had a living trust in place.
If you transfer your assets into a trust, then the trustee has the right to pass your assets to your beneficiaries without any court order. It makes the whole process quicker and cheaper after your demise. Establishing a living trust may cost you some money and effort.
The probate process after your death doesn’t allow privacy. In that process, all the details of your assets enter into the public records. Therefore, anyone from the public can access your documents once the probate process is over. If you don’t want to disclose your property details publicly after your death, then living trust can be an excellent option for you.
Avoiding Family Disputes
Without proper estate planning, your beneficiaries may not get the right share after your demise. If you make a will to distribute your assets to your heirs, then your family members can challenge it. However, by building trust, you can specify the name beneficiaries and their share too, which is not challenging. It is important to note that if any property owned by you is not in the living trust, then it still requires probate after your death. Therefore, you must include all your newly owned assets into the trust.