The benefits of a living trust in CT are considerable, and we will take a look at the subject in this post. You may be surprised when you learn about the advantages that this very effective estate planning tool will provide.
One of the misconceptions about trusts in general is the idea that you no longer have control of assets that you conveyed into a trust. To a large extent, this is true as it applies to irrevocable trusts.
At the same time, if you create an irrevocable trust, you are doing so for a reason, so there is control on that level. That is another subject that we will address at a different time.
Getting back to the living trust, this is a revocable trust, and the word can be taken quite literally in this context. If you want to dissolve or rescind the trust and reassume direct personal possession of the property that you conveyed into it, you are free to do so.
The control extends beyond the power of revocation. While you are living, you will act as the trustee of your own trust. This means that you will be the administrator, and you will have the ability to use the assets in any way that you see fit.
Along the way, you can change the terms at any time. Relatively minor changes can be made through the utilization of an amendment, and more significant changes can be made with a trust restatement.
Incapacity Planning and Spendthrift Protections
No one wants to consider this unpleasant reality, but a significant percentage of elders experience cognitive impairment. Alzheimer’s disease is the leading cause, and there are other culprits, so this is a very real possibility.
When you have a revocable living trust, you name a successor trustee to administer the trust after your passing. They can also be empowered to act as the disability trustee. If you cannot manage your own financial affairs at some point, they would be empowered to administer the trust.
A lot of people have concerns about the money management capabilities of their heirs. If you are in this category, a living trust can provide a solution. After your death, the trust would become irrevocable, and the beneficiaries would not be able to directly access the principal. This arrangement would also extend to their creditors, so there is asset protection.
In addition, you can limit the distributions to prevent reckless spending or poor decision-making that has a long-term negative impact. The trust can be remain active for up to 21 years, so you can arrange for limited distributions over an extended period of time if you choose to do so.
Streamlined Estate Administration
Simplified estate administration is another benefit. If you use a will to state your final wishes, the executor that you name will admit the will to probate. This is a costly and time-consuming legal process, and there is a loss of privacy, because the records are available to interested parties.
When a living trust has been established, the trustee can distribute assets to the beneficiaries outside of probate. To account for assets that were never conveyed into the trust, you can include a pour-over will in your broader estate plan. This will trigger the transfer of the assets into the trust after you are gone.
Schedule a Consultation Today!
As you can see, people that do not understand all the options that are available sometimes accept limitations unnecessarily. The benefits of a revocable living trust are quite significant, and this is just one of the additional tools in the estate planning toolkit.
When you work with our firm, we will provide personalized attention, because each situation is unique. After we understand your position, your family dynamic, and your objectives, we will help you devise a plan that is custom crafted to suit your needs.
If you are ready to get started, you can call us at to 860-548-1000 to schedule a consultation appointment at our Westport or Glastonbury, CT estate planning offices. There is also a contact form on this site that you can fill out to send us a message.