A living trust, also referred to as a revocable trust, is a popular tool that you can use when planning your estate. It will help prevent your property from going through probate court, which avoids a lot of hassle for your loved ones so they can inherit your property faster. If you are not sure if you should use a living trust instead of a will, here is what you should know about this form of estate planning.
What Are Living Trusts?
A living trust is a document that allows you to move your assets to a trust when you're still living. It can include bonds, stocks, real estate, jewelry, art, vehicles, and all types of personal property. You'll also name the trust's beneficiaries, and what assets they will receive.
How Are Living Trusts Similar To Using Wills?
Much like with a will, you're allowed to make changes to your trust whenever you want. You can add additional assets, remove assets, change who the beneficiaries are, or even cancel the trust completely.
A trust also requires a trustee, who has responsibilities that are very similar to a will's executor. The trustee is the person responsible for distributing assets after you pass away. They will also have the power to manage aspects of any financial affairs that you need taken care of if you are incapacitated, which include paying bills.
How Are Living Trusts Better?
The biggest difference between these documents is what happens after you pass away. A will needs to be officially filed with the probate court, then follow a legal procedure that could take a long time to finalize. All your beneficiaries are required to wait until this process is finished before they are allowed to receive assets. A will also becomes public record, and anyone can gain access to it to see what you left behind to your beneficiaries. This can make it difficult to maintain privacy with how assets are divided.
A living trust allows the trustee to start distributing assets immediately, without the need to go through the probate process. The distribution of assets in a living trust is private, with only the trustee knowing how assets are to be divided.
As you can see, a living trust is a valuable tool when planning your estate. If you need help setting up a living trust of your own, work with an estate planning attorney at a firm like Wright Law Offices, PLLC, in your area.