Far too many people put the subject of estate planning on the back burner. They are under the assumption that you draw up a last will late in your life and that’s all there is to it.
In reality, this is a very shortsighted perspective. First and foremost, you never know what the future holds, and there are no guarantees. Secondly, a last will is not always the best asset transfer vehicle. For a significant percentage of individuals, a living trust would actually be a far better choice.
Streamlined Estate Administration
One major advantage that you gain if you use a living trust instead of a last will as your primary asset transfer vehicle is the streamlined estate administration. When you establish and fund a living trust, property that comprises your estate will be owned by the trust. As a result, it will all be easily identifiable in one place, and this simplifies the administration process for the trustee.
Secondly, a last will must be admitted to probate after the passing of the testator. This legal process provides protections for creditors seeking satisfaction along with some other safeguards. It is not inherently negative, but it is not necessarily positive for the rightful inheritors.
Probate is time-consuming; it will typically take about nine months to a year to run its course, and no inheritances can be distributed during this interim. There are also significant expenses that accumulate during the process, and privacy is lost, because probate records are available to the general public
Asset distributions through the terms of a living trust are not subject to the probate process, and this is one of the major advantages that many people do not consider when they don’t have enough information.
Once you reach the age of 67, your life expectancy is 85 years if you are a man, and for a woman, it is 87 years. Four out of every 10 senior citizens that are 85 years of age and older have Alzheimer’s disease, and this is not the only cause of cognitive impairment.
As you can see, many people become unable to make sound decisions late in their lives. To account for this, you could empower a disability trustee when you establish a living trust. While you are alive and capable of handling your own affairs, you can serve as the trustee. If incapacity ever strikes, the disability trustee would step in to administer the trust on your behalf.
If you have someone on your inheritance list that is not very good at handling money, you may have concerns. This is fully understandable, and you do have recourse if you use a revocable living trust as the centerpiece of your estate plan.
You could instruct the trustee to distribute limited assets to a spendthrift beneficiary over an extended period of time. For example, if you have income producing assets in the trust, this beneficiary can receive the annual earnings from the trust broken up into monthly installments.
A spendthrift clause would also provide asset protection from creditors of the beneficiary. Simply stated, the creditors would not have access to the principal, because the beneficiary would not have this access due to the existence of the spendthrift provision.
Download Our Estate Planning Worksheet
If you take some time to explore this website, you will find that we have many different viable resources that you can tap into absolutely free of charge. One of them is our carefully prepared worksheet.
We urge you to take advantage of this opportunity to build on your knowledge, because we are certain you will find that it was time well spent. To obtain access to the download, click the following link: Free Estate Planning Worksheet.
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Written information is fantastic, and when you understand all the facts, you will fully understand why careful, informed estate planning is so very important. If you are ready to take the ultimate step, you can send us a message to set up a consultation appointment, and we can be reached by phone at 513-721-1513.
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