Whether you are currently planning your estate or simply considering getting your affairs together, it is critical to explore all of your options. In addition to creating a last will and testament, a living trust may have many benefits.
Depending on the unique circumstances of your estate, you may wish to add a revocable or irrevocable living trust.
What is a living trust?
Living trusts are documents created by estate owners to help distinguish who they wish to receive their assets and property if they should pass or become incapcitated. The trust can be either revocable or irrevocable. Revocable trusts allow you to modify them throughout your life. Yet, the terms of an irrevocable living trust become permanent once you sign the final document.
What are the advantages?
Living trusts offer a wide-range of benefits, according to Forbes. Assets and property placed in the trust are transferred directly to the beneficiaries named in the document. The estate does not have to go through the probate process. Furthermore, the document allows you to customize the conditions as to when the beneficiary should receive the inheritance. For example, if you wish to leave your assets to a minor, you could attach an amendment saying the child could start receiving assets when they turn 21 years old or may use the money to pay for school.
Other benefits include the following:
- Keeps assets within the family, as beneficiaries do not have to share their assets with spouses
- Ensures families privacy, as trusts are not a matter of public record
- Reduces estate taxes which may be imposed on living wills and inheritance
You may also opt to have both a living trust and a last will and testament, as they both may serve different purposes in your overall estate plan.