Have you ever wondered what is living trusts? If you have you are not alone. It’s a written document, which lets you transfer estate property to beneficiaries. Your assets are put into trust, such as bank accounts, your home, stocks etc., which are managed by yourself during your lifetime and transferred to the beneficiaries when you pass away. The difference though between a will and a living trust, is that a trust is usually not subject to probate, which can subject the property of years of being tied up in the court system, consuming a portion of the value of the property in court fees. The following will help you in knowing what is living trusts?
What is living trusts and what can it do for me?
A living trust will secure that all of your assets will be managed according to what your wishes are. This also includes when you no longer can manage them yourself. You can serve as the trustee of the living trust, or you can choose and name someone else that you trust. Naming a trustee can be taken over if you become incapable of managing your own affairs, such as an accident or illness. When you pass away, the trustee that is chosen will take over and accumulate your assets, pay your debts, and distribute your assets according to your directions. A living trust can be done without approval from the courts.
What is living trusts and does everyone need to have one?
If you are a young married couple with no children and have not accumulated many assets there is no need to have a living trust. Anyone that has not many assets and have a much more simple estate plan, also do not need to have a living trust. The more assets you have such as real estate, the more you need a living trust.
If I have a living trust do I need a will?
You will definitely still need a will with your assets in your name. The living trust will have what is called a “pour over provision”. What it means is that any assets will be transferred over to the trustee of the living will at the time of your death. If you have minor children, the trustee will hold the assets in a trust for them.
What is living trusts and what different kinds are there?
There are two different living trusts, which are testamentary trusts and irrevocable trusts. Testamentary are trusts that are based on what the instructions are in your will. These trusts are not authorized until the probate process. They can be used for small children and other people that need someone to manage their assets after you pass away.
Irrevocable are trusts that cannot be altered or revoked after they have been created. These are usually delicate tax documents such as irrevocable life insurance trust, charitable trusts and irrevocable trusts for children. A lawyer that specializes in estate planning will be able to help you with these documents.
There are good reasons to have a living trust. Consulting a professional will help you in your overall estate planning.
29 Oct
