Benefits of a Living Trust
I work with clients to set up Living Trusts so they can avoid the expense and lengthy process of Probate. To better understand the benefits of a living trust, there is basic information provided below. Should you have additional questions, I encourage you to be in touch.
What is a Living Trust?
A Living Trust is document signed during the client’s lifetime. The trust names someone to manage the client’s assets during lifetime and distribute the assets after the client’s death. It is called a living trust because it is effective during lifetime. It is revocable – meaning the client can change it during their lifetime. Usually the creator of the trust acts as the trustee until his or her own death.
4 Key Advantages to a Living Trust
- You Avoid Probate (Court Supervised Administration) – The probate process is expensive, takes a long time, and is a public proceeding. See detailed discussion below.
- You May Arrange for Financial Management During Incapacity – The trust provides for management of your assets during lifetime and names someone to assume responsibility for the payment of bills and collection of income if you become disabled.
- You Reduce or Eliminate Estate Taxes – If the net value of assets is high enough, there is an Estate Tax at the second death. A properly drafted trust with tax provisions can reduce or eliminate that tax.
- You May Control Distribution of Assets – Determine a set of specific parameters for the distribution of your assets.
Read more about the Realities of Probate.