What Are the Advantages of Creating a Living Trust for My Family?
Only around 40% of American adults have any kind of estate planning documents in place.
That means 60% of adults do not have their property and other assets protected for when they die. This leaves their family and loved ones in a bind figuring out what to do next.
Often the first thing that comes to mind when thinking of estate planning is drawing up a will. But there are other options. Creating a living trust may be a better option for you and your family.
Below are some of the major benefits of a living trust.
Saves Family Money
The main reason that people choose to have a living trust instead of a will is that it avoids the probate system. Probate is the legal proceedings to decide whether a will is legal and binding. Or it also is the court session to decide where the property will go if there is no will provided.
When a person with a living trust dies, the trustee automatically takes possession and control over what they've been designated for.
This whole system saves the family money in the long run because they don't have to pay for the lawyers and any other legal fees that may be acquired during probate. There is also the potential to save a lot of money because everything moves faster.
Instead of it taking months or even years to distribute the assets, it can be a much shorter time period by cutting out the middle man.
As a safeguard, a revocable living trust often turn into an irrevocable living trust at the time of death. This means that the trustee will not be able to change the wishes declared and will have to execute the distribution of property as stated.
Having a living trust saves your family time, energy, and money after you have passed away.
Another major benefit of having a living trust is that they are much more private than other estate planning avenues.
Because a living trust doesn't have to go through the probate system they don't become public record. When a will becomes public record anyone can request to see it and what was determined.
For those who value their privacy and autonomy, a living trust is a great option. The distribution of your wealth is handled within your trusted circle and that is it.
This kind of privacy may also be a benefit to your family who is left behind and lessen any drama that may ensue from inheritances.
Prepares for More than Death
One of the advantages of a living trust is that it can be invoked at other times before death.
Specific stipulations can be added to the living trust to designate when the trustee can take over the management of property and finances. The originator of the living trust can decide how it is determine what circumstance would qualify.
This could be a terminal illness, an incapacitation, or a mental disability. The originator also can specify in the trust how these can be determined; through an official diagnosis from a doctor or otherwise.
A main reason that people do any kind of estate planning is for the peace of mind knowing that your family is going to be taken care of after you pass away.
But sometimes there are things that happen to us that make it impossible to take care of our families even before we pass away. Having a living trust with this kind of addition helps to give you even more peace knowing that they and your property will be taken care of regardless of any negative situations.
Harder to Challenge
Having any kind of estate planning is better than having none. But one of the major downsides of having a will is that it can be contested in court.
If a person in your life feels like they deserve more of your assets than was outlined in the will they can bring it to court and argue that. It is often argued that the originator was not in their right mind or had changed their mind but hadn't gotten a new will yet.
After the case is heard, it could be found that your will is not valid and the contender can possibly get more than you intended. Which sounds like a bad drama movie.
With a living trust, there is much less chance that this will happen.
In order for changes to be made to a will, a new can be drawn up or you can create a codicil to your existing will. So often you are encouraged to take a long time to make sure you have everything covered. A living trust is different in that it can change rather quickly.
These constant changes, updates, and upgrades to a living trust show to a court that the originator was heavily involved in the protection of their assets. It is much harder to dispute the distribution of assets when the originator was clearly aware of what was going on.
If you are adamant about how you want your assets and property handled, a living trust may be the best option for you to ensure it goes how you want it to.
Creating a Living Trust
Estate planning is a very important thing every adult needs to do to protect themselves and their loved ones.
There are a lot of reasons that we could make up for why we don't need to do it. We don't have enough property or assets for it to matter. We're too young for that. We don't want to think about dying. But in all reality, creating a living trust is something every adult should look into, regardless of their situation.
If you want to learn more about what it takes to get a living trust, check out these forms to get started.