A lot of people think that estate planning boils down to the creation of a simple will. You can go that route, but there are actually some good reasons to utilize a living trust as the centerpiece of your estate plan.
Let’s look at five compelling reasons to use a living trust to facilitate asset transfers.
Ongoing Control
There are those that don’t consider creating a trust because they don’t want to lose control of the assets. This is understandable, and you do give up direct access if you establish an irrevocable trust.
However, with a revocable living trust, you retain the right of revocation. If you want to dissolve the trust and take back direct personal possession of the property, you can do so at any time.
Plus, you would be the trustee while you are alive and well. As a result, you would be able to do anything you want to do with the assets that you transferred to the trust. You can also change the terms of the trust along the way, so there is total flexibility.
Probate Avoidance
When a will is used as an asset transfer vehicle, it is admitted to probate. This is a legal process that takes place under the supervision of a court. Though it serves a purpose, it comes with some significant drawbacks for the rightful heirs to an estate.
First, it will take nine months or so at minimum, and no inheritances are distributed while the estate is in probate. Secondly, probate expenses consume a portion of the estate before it is transferred to the beneficiaries.
Lastly, probate is a public proceeding. Interested parties can access the records to pry into all of the details, so there is a loss of privacy. This information can cause ill will among people who were close to the decedent.
Streamlined Estate Administration
When you create a living trust, you name a successor trustee to assume the role after your death. Since all or most of the assets that comprise the estate would be held by the trust, the process is streamlined.
There is also a way to address assets that were never conveyed into the trust for one reason or another. You can include a pour-over will, and the assets will be transferred over to the trust.
Spendthrift Protections
The beneficiaries that are named in a simple will receive their inheritances in lump sums. This can be a source of concern if you are leaving money to someone that can be described as a spendthrift.
You do not have to provide beneficiaries with all their inheritances at once when you have a living trust. For example, you can instruct the trustee to distribute a certain amount each month until the beneficiaries reach certain age plateaus.
There is also asset protection after you pass away. The trust would become irrevocable, and the beneficiaries would not have direct access to the assets. This will also apply to their creditors, so assets that are held by the trust would be protected.
Incapacity Planning
It is not a very pleasant subject to contemplate, but many elders become unable to make sound decisions eventually. When you have a living trust, you can name a disability trustee to manage the trust in the event of your incapacity.
Attend a Complimentary Seminar!
We are conducting a series of seminars over the coming weeks that cover the most important topics. There is no charge to attend these events, and you can visit this page to obtain details and registration information: Estate Planning Seminars Schedule.
Need Help Now?
Our attorneys are ready to spring into action if you would like to work with a Glastonbury or Westport, CT estate planning lawyer to put a plan in place. You can send us a message to request a consultation appointment, we can be reached by phone at 860-548-1000.
