-WHY A TRUST IS BETTER THAN A WILL-
A living trust is an effective way to handle one's estate, especially in providing clear direction on how one's assets should be disbursed (and to whom) after death. A living trust primarily helps individuals maintain greater control over their assets and have their wishes carried after they die.
A living trust can help save the expense and delay of death-time probate, which can last as long as two years and take up to 15-to-20% of an individual's estate's value. And you don't have to register a living trust with the courts, unlike a Will. So, a living trust provides you and loved ones with more privacy than a Will. Keep in mind that a Will is meant to be probated which then becomes available to everyone.
A living trust give you better control of your assets while you are living, and better control after your death—and as such, it offers a barrier against financial exploitation and protection of the inheritance received by loved ones after you’re gone.
For example, a parent leaving money to a child could leave that money with a trusted family member or a third party, such as a bank or other financial institution, to be given to the child at whatever age the parent decides - or even in annual increments. Other examples include setting up trusts to keep the assets away from the "in-laws" and other creditors like bankruptcies and lawsuits, etc.
Other Benefits of a Revocable Living Trust
You'll bypass probate. You don't want a judge deciding who gets your assets when you're gone. A living trust gives you the right to distribute your assets, as you see fit.
What if your estate planning wishes are nontraditional because you want to favor one child, or disinherit one, or maybe you have a special charity in mind, or maybe you are in a nontraditional relationship? The use of a Living Trust is a better way to navigate these situations.
Helps Bomb-proof your estate from disharmony from the fighting of heirs. We have seen a 25% risk of disharmony among heirs. The use of a Living Trust can significantly reduce the risk of litigation and fighting.
You'll have peace of mind. A living trust takes away any angst over how your estate will be handled after you're gone. In black and white, a living trust provides clear direction on how your assets will be distributed.
How to Set Up a Living Trust
Setting up a living trust is a straightforward task, but it's advisable to bring aboard an experienced estate planning attorney to help establish your trust. In doing so, follow these guidelines:
Step 1: Choose What Type of Trust Works Best for You. Selecting a living trust depends on several factors. Are you married or single? Do you have children? Do you own a business? What is the size of your estate?
Step 2: Decide What Will Go into Your Trust. Your next move is to choose what assets will go into your trust. By and large, living trusts are meant to house large assets, like an investment portfolio, any business you own or your home.
Step 3: Pick Who Will Receive Assets from Your Trust. Usually, a trust will benefit a spouse, family member, friend, business partner, or a charity - but it doesn't have to. Think carefully who matters to you, and who will inherit your trust's assets.
Step 4: Name a Trustee. You'll want a trusted partner to administer your living trust after you die. It could be a spouse, son, daughter, a professional trustee or anyone you choose. Make sure you discuss the trust with any potential trustee beforehand, as administering a trust is a big responsibility.
Step 5: Sign and Fund Your Trust Document. Once completed, you'll sign your trust in the presence of a notary public. A copy should be shared with your loved ones. And a certificate of trust should be shared with all your financial institutions.
You'll want to store your trust in a safe spot, like a home safe, for easy access. My law firm will retain an electronic copy for your convenience.
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