What is a Living Trust? A living trust is simply a legal document that protects individuals assets and business interests after their death or in case of incapacity or inability. A living trust also enables your estate to be settled immediately without Probate, thereby saving time and money. It is an asset protection tool which helps to protect your family members from the financial consequences of you passing on. When setting up a living trust, there are three basic decisions that need to be made, which are as follows: what assets you want protected, how will the trust be set up, and who will manage the trust once you die. In the succeeding paragraphs we will go into more detail regarding these issues.
When it comes to protecting your assets, whether they be tax assets, investments, personal belongings or jewelry, you may need the help of a Living Trust attorney to make these decisions for you. Using a Living Trust can dramatically reduce the paperwork associated with estate planning, expedite the process of probate, help reduce your taxable income and provide you with peace of mind. If you have questions about incorporating a Living Trust or if you would like to know more about probate, contacting a Living Trust attorney for an initial consultation is highly recommended. There are many qualified attorneys who are available to give you a free initial consultation to discuss your specific needs and determine if a living trust might be right for you.
Most people who create a living trust utilize a simple document which has several main features that serve to protect their assets. In general, these documents establish the name of the trust (you) and the beneficiaries (also you). The names themselves can be very helpful in the event of someone dying and leaving a spouse and children financially liable for that spouse’s estate. Also, the document may specify that certain assets will be held by the Trustee, such as bank accounts, retirement accounts, real property and automobiles. This allows for an easy process of disinheritance in the event that one of the beneficiaries becomes incapacitated. Also, the purpose of the living trust may allow for an easy transfer of some assets to beneficiaries when the Trustee passes away, without needing a court order.
Unlike some other types of asset protection strategies, most people who use living trusts utilize them for the benefit of family members who are not the primary beneficiary. Unlike other asset protection strategies, the primary beneficiary of a revocable living trust typically never has to pay any taxes because the profits generated by the investments are exempt from income tax. Another advantage of revocable living trusts is that they generally tax-free. This means that the profits generated from investments are exempt from federal and state taxation. In addition, unlike some other types of asset protection strategies, the proceeds from a revocable living trust are exempt from inheritance tax.
For those individuals considering putting a house into a trust, it’s important to consult a living trust attorney who can help navigate the process. Because there are a number of different types of revocable living trusts, it’s important to be knowledgeable regarding the most common types of transfers. Additionally, it’s wise to consider how the property would be used if the Trustee ever became incapacitated or passed away. While certain types of trusts may allow for the transfer of property without concern for whether or not the Trustee is still alive, others require a special set of circumstances to make it possible.
It’s important to understand that putting a house into a revocable living trust may avoid probate, but that avoiding probate should not be considered a side benefit. When estate planning, intestacy, and/or probate are considered, it can be one of the most complex and time-consuming aspects of estate planning. A qualified living trust attorney can help to alleviate the stress that may come with planning an estate.
