When people start to age, there is an increased amount of conversation that focuses on wills and living trusts. For those people who have large estates, these things become quite useful in securing a person’s assets and at the same time making sure that the right people will be given what is rightfully theirs. However, this is just a vague idea of what a living trust can do.
What is a living trust?
Taken from its name, a living trust is a kind of document that you create while you are alive. It can be revocable and irrevocable depending on what you state in the document. When a living trust is revocable, you can still change or amend it during your life even after you sign the document. On the other hand, when it is irrevocable, you can no longer change it once you have placed your signature.
A living trust is different from a will in that they may have the same purpose but they function differently. A living trust has three parties – the owner of the assets, the trustee who manages the assets on behalf of the owner, and the beneficiaries who receive the assets once the owner dies. The owner can also be the trustee in some cases. This is actually favorable for a lot of estate owners because they can manage their estate while they can.
What are the benefits of having a living trust?
There is no doubt that a living trust has a lot of benefits. Here are some of them:
- It can allow you to manage your assets.
When you name yourself as the trustee of your living trust, then you have the authority to manage your assets as long as you are alive. This will allow you to dispose of or increase it as you deem fit. You can also name a trustee after a certain period of time; you don’t even have to wait for your death to do this.
- It will help you avoid probate.
One of the differences of a will and a living trust is that a living trust avoids probate. Probate is the process of proving the validity of a will and distributing your assets. Avoiding probate is a good option for those who wish to keep their estate private. Since a will becomes a public document, public scrutiny and invasion of privacy cannot be avoided.
- It can reduce estate taxes.
Lastly, a living trust can help save money from estate taxes. At first, it would seem like a living trust is expensive because the cost of doing so is much higher than writing a will. However, when you pass away, there will be fewer taxes imposed and your family will no longer have to pay for the expenses incurred during probate. Moreover, in the event that there will be someone who will contest your living trust, the costs will be minimal as compared to the whole probate process with a will.
Do I need a living trust?
Not everyone needs a living trust. In fact, those who don’t have a relatively large estate and who plan to pass on their assets to their children do not need a living trust. A living trust is quite expensive to make (what with attorney’s fees and all), so it might not be worth it if you don’t have a lot of money.
However, if you have a sizable estate, then the right thing to do is to have a living trust. Based on the benefits stated above, it will help protect you (or your living trust) from going into probate. This can also reduce a considerable amount of tax which is beneficial so not a huge portion of your estate would have to be reduced to cash for taxes.
At the end of the day, it is still a personal decision of whether or not to get a living trust.
Now that you know more about a living trust and what can it do for you, you might want to start crafting one. But as you know in legal matters, the devil is in the details. Instead of writing a living trust on your own, seek the help and advice of Living trust attorney Los Angeles so that you will be guided in writing this crucial document.
