Why is it so important to establish a living trust? In essence, a revocable living trust serves as a form of protection, allowing you to safeguard both your assets and heirs upon your passing. While the majority of people assume estate planning isn’t a topic you broach until retirement, the reality is, the earlier you start navigating the process, the stronger your planning will be.
So, why do you need a living trust? Here’s a deep dive into everything you need to know.
Why You Should Establish a Living Trust
There’s a myriad of reasons why you should sit down with an estate planning expert and prepare an action plan for how your assets will be dispersed and handled upon your passing. One of the biggest advantages is that a living trust can help anyone you wish to name as a beneficiary, along with your surviving spouse, during the emotional and overwhelming period that comes with the loss of a loved one.
There are a slew of different assets, such as bank accounts, that can be placed into a living trust – subsequently ensuring your family and loved ones are properly taken care of upon your death or incapacitation. Other assets, such as retirement accounts and life insurance policies, are typically not included in your living trust. Why? Because, unfortunately, they can lose their tax benefit if placed into a living trust.
What are some additional benefits to establishing a living trust?
1. Avoid Probate
Probate can be a long, intricate, and headache-inducing process if you don’t have a strong estate plan in place upon your passing. Probate is a court-led legal process where your assets are handled and administered after you’ve passed on.
Without a proper living trust in place, you’re subjecting family and loved ones to the heartache and complexities that come with endless court dates and battles over how your assets should be distributed. By setting up a living trust, it’ll provide specific instructions on how you’d like your assets allocated, ensuring your wishes are adequately carried out.
It’s also vital to consider that the probate process entails attorney-related fees – an expense that can quickly add up and cause financial turmoil for your loved ones. To avoid having your beneficiaries spending countless hours and hard-earned dollars on probate, it’s imperative to establish a living trust.
2. Protect Your Privacy
Estate planning and the creation of a trust ensures you have the legal documentation in place to safeguard assets or matters that are private in nature. While there’s no doubt that creating a will is a vital piece of a smart estate planning strategy, not all property can be included in a last will and testament.
Assets not included in, or covered by, a will are subject to probate and become public records. In other words, anyone has the ability to research and access what assets were in your estate, as well as what each of your beneficiaries is receiving. Some states even allow residents to procure this information online. By preparing a living trust, you’ll avoid your affairs becoming public knowledge.
3. A Living Trust is Flexible
A living trust offers enhanced flexibility when it comes to how your assets are distributed. You have the capacity to predetermine how you’d like your assets to be handled upon your passing, leaving nothing to be misinterpreted in court or among loved ones. For example, one facet of your living trust may include details about guardianship and how you’d like your children looked after in the event of your death.
Enjoy greater control while employing a smart time and cost-savings strategy by creating a living trust. Knowing what to do with your assets can sometimes feel like a difficult subject to tackle, but that’s why the experts at Smith Barid are here to help. Our team of renowned lawyers, specializing in living trusts, will ensure all your bases are covered when it comes to the estate planning process.