There are some types of trusts that are used by high net worth families that have complex objectives. This being stated, a living trust is a versatile estate planning device that can be the ideal choice for people of relatively ordinary means.
If you use a last will to state your final wishes, you would name an executor in the document. This is the person that would handle the estate administration tasks after you are gone. The executor would be required to admit the will to probate, and the court would provide supervision during the process.
Probate will take somewhere in the vicinity of eight months to a year if there are no complications, and the heirs do not receive their inheritances while the estate is being probated by the court. There are considerable expenses that accumulate, and probate is a public proceeding, so privacy is lost.
Assets that have been conveyed into a living trust can be transferred outside of probate. This is a major advantage, and another one is the ability to include spendthrift protections. These are a couple of the benefits, but there are a number of others.
A living trust is revocable, and the word is self-explanatory. If you ever want to dissolve the trust and take back direct personal possession of the assets, you can do so. Plus, you can act as the trustee and the beneficiary while you are alive, so you have absolute control every step of the way.
You name a successor trustee when you are creating the trust, and you name your heirs as the successor beneficiaries. It is possible to name someone that you know personally to act as the trustee, but many people will use a professional fiduciary such as a trust company.
When you are establishing the trust declaration, you can name a disability trustee. This individual or entity would be empowered to act as the trust administrator if you ever become unable to handle your own financial affairs.
Yes, you have the ability to add or subtract beneficiaries, and you can change the successor trustee if you ever choose to do so. You can also convey additional property into the trust after it has been established and initially funded.
To account for this, you can include another estate planning document called a pour over will. This would allow the trust to absorb assets that you did not convey into it while you were alive.
You can instruct the trustee to manage income producing assets and distribute resources to the beneficiaries in a measured fashion over any time frame that you choose.
Absolutely, this is a great course of action for many married couples. A joint living trust can facilitate very efficient postmortem asset transfers, and the structure can remain in place after the passing of one spouse.
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