A living trust is a very effective estate planning device, and many people hear about them because they facilitate the avoidance of probate. This is a legal process that takes place under the supervision of a court, and it would be necessary if you use a will to transfer assets.
Asset transfers that are facilitated through the terms of a living trust are not subject to probate. This is a good thing because probate is time-consuming and expensive, and it is a public proceeding, so there is a loss of privacy.
This being stated, there are other advantages that living trusts provide, and will take a look at five of them in this post.
A lot of people assume that you lose control of assets that you convey into a trust because the terms are set in stone. This is not the case with a revocable living trust, because as the name would indicate, you can revoke the trust at any time.
You would act as the trustee while it is intact, so you would have access to the assets every step of the way. Plus, you can change the terms and convey property into the trust after it has been created.
As an elder law firm, we advise clients about legal and financial matters that are of interest to senior citizens. It is not a pleasant message to convey, but a very significant percentage of elders become unable to handle their own affairs eventually.
Alzheimer’s disease is the leading culprit because it strikes over 30 percent of the oldest old, and there are other causes of incapacity. You can account for this possibility when you have a living trust.
When you are establishing the trust, you will name a successor trustee to administer the trust after your passing. You can also give this individual the power to step into the trustee’s role in the event of your incapacity, or you could choose someone else to act as the disability trustee.
If you are married, you can create a joint living trust with your spouse. This can be the ideal estate planning solution if you own a lot of valuable property jointly.
You would each act as co-trustee while you are living, and the survivor would be the sole trustee after the death of one spouse. They would assume control of the jointly held property, and separate property that was conveyed into the trust would be distributed to the beneficiaries.
If you want to leave personal property that you conveyed into the trust to a beneficiary that is not your spouse, you are free to do so. A surviving spouse cannot change the terms that apply to the distribution of the separate property.
You Can Include a Pour-Over Will
When you have a living trust, you may pass away while you are still in direct personal possession of assets that you never conveyed into the trust. You can account for this possibility through the inclusion of a pour-over will.
This type of will would trigger the transfer of the assets into the trust after your passing. The probate court would be involved, but it is a simple, straightforward process.
Living Trusts Are Affordable to Create
There are those that are under the impression that you have to pay exorbitant legal fees to create a living trust. In fact, most people that we consult with are pleasantly surprised when they learn about our rates considering the advantages that living trusts provide.
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As you can see, a revocable living trust can be the ideal centerpiece of many estate plans, and there are other approaches that can be taken to address specific objectives.
When you choose our firm, we will gain an understanding of your situation and make the appropriate recommendations, and you plan will be custom crafted to suit your needs.
If you are ready to get started, you can schedule a consultation at our Cincinnati estate planning office if you call us at 513-721-1513. There is also a contact form on this site you can use to send us a message, and if you reach out electronically, you will receive a prompt response.