A living trust, also referred to as a revocable trust, places your assets into a trust throughout your lifetime and then transferred to your heirs upon your death. It is a legal document just like a will, but it has several differences.
The Pros
Living trusts offer several benefits, so many estate owners are choosing them over wills. Here are a few upsides of living trusts:
- A living trust lets estate owners appoint a trustee to carry out their wishes upon their death or if they are no longer able to manage their financial or legal affairs while still alive.
- A living trust will not be vulnerable to estate taxes, lessening the tax burden on families.
- With a living trust, a trustee can take care of an estate owner’s assets if he or she becomes sick.
- A living trust offers the benefit of privacy. It doesn’t have to go through probate like a will, so details about assets won’t be open to the public. Families do not have to worry about the public having access to their sensitive information.
- The probate process can be avoided with a living trust. This means heirs don’t have to pay probate fees and can receive their assets a lot faster.
- A living trust can be favorable to individuals who own substantial assets, have complex finances or other unique personal circumstances.
The Cons
- Individuals who choose to establish a living trust have to be meticulous in transferring ownership of all their assets to the trust. An experienced estate attorney can help them do this in an efficient and timely manner.
- A living trust might not offer many benefits to individuals with no minor children, few assets and limited wealth.
- A living trust might not be needed for estate owners who live in states with uncomplicated probate processes, like as New Jersey, New York and Connecticut.
Hiring an Estate Planning Lawyer
It is never too early to plan your estate. However, the planning process can involve many complications, so it’s important to hire a qualified estate planning attorney. He or she can ensure all legal requirements are met and that all the necessary information is included in your living trust. Schedule a meeting with an estate planning attorney relies on soon to discuss your estate. Many estate planning lawyers offer free initial consultations, so you have nothing to lose by speaking to one.
