Creating a Living Trust
Within estate planning, individuals have many tools at their disposal to ensure property and assets are divvied according to their wishes. One of such tools is a living trust. A living trust is a legal document that places your assets in a trust. Once you have died, the trust is handed over to the beneficiary, who you will have chosen when creating the trust. Given its frequent use in estate planning, this article will provide a quick summary of its benefits and mechanics, but if you have any questions about creating a living trust or would like to compare it to other options, please contact us at Law Advocates Group.
How Does a Living Trust Work?
When you set up a living trust, you can make either a revocable or irrevocable one. With irrevocable trusts, you cannot change or get rid of it, but, in contrast, a revocable trust allows you to change it during your lifetime. A trust requires a trustee to oversee it and distribute the assets after your death. You can be the trustee during your lifetime, but make sure to name another trustee for following your passing. The person who receives the assets in your trust is called the beneficiary. Once you have died, the trustee will manage the distribution of the assets to the beneficiary. At that point, the beneficiary becomes the owner of the trust’s assets.
Why Create a Living Trust?
Along with having a will, many people choose to create living trusts. The most useful incentive for a living trust is that the beneficiary does not need to go to probate court in order to receive the assets. The beneficiary knows from the beginning that the assets will belong to them and that they will not have to go through a legal process to receive them following your death. Also, a living trust does not require witnesses or an executor.