Five Benefits of Setting Up a Living Trust
Creating a trust-based estate plan has many benefits. If you are considering what type of estate plan you would like to create, we recommend speaking with an experienced estate planning lawyer. Depending on your needs, you could benefit from a simple will-based estate plan. However, it is possible that creating a trust-based estate plan will save you money and time in the long run. The experienced estate planning attorneys at Arnold & Smith, PLLC, can review your financial situation and advise you of your best options. Contact us today to discuss the benefits of setting up a living trust.
- Avoiding Probate Court
Many people do not realize how long and expensive the probate process can be. In the probate process, the probate court oversees the distribution of a deceased person's estate. An estate includes all of the property and assets the deceased person owns during his or her lifetime. Even in the cases of moderately straightforward estates, the probate process can take months. If you would like your beneficiaries, such as your surviving spouse and children, to receive your assets as soon as possible, you should consider creating a living trust.
You can create a trust agreement that allows your loved ones to receive your property immediately after you pass away. Many people create a trust and transfer ownership of their life insurance policy into the trust. When they pass away, the life insurance policy will pay out the proceeds into the trust, giving the surviving spouse liquid assets that he or she will need to pay for end-of-life costs.
The transfer of your estate to your beneficiaries occurs without the court's supervision when you have created a revocable trust. In many cases, transferring assets through a trust is less expensive than going through the legal probate process because he will not have to pay additional court and legal fees.
When you create a revocable trust, you will have complete control regarding how your assets will be distributed during and after your lifetime. You can specify how you would like your beneficiaries to receive your assets when the time comes. You may want to transfer all of your assets to your loved ones immediately after your death. Or you may want to give them smaller amounts over a longer timeframe.
Suppose you have grandchildren who are young adults. You may want to provide them with a limited amount of yearly compensation while they attend college. Many of our clients will set up their trust so that their adult grandchildren will not inherit assets until they turn 25 or 30. You can also tailor your trust to your needs. For example, if you have a pet you would like to take care of after you pass away, you can create a pet trust. If you have an adult child with special needs, you can create a special needs trust. Likewise, if you would like your assets to grow and continue providing income for a beloved charity, you can create a charitable trust. Whatever your goals, creating a trust gives you more control over your assets and how they will be distributed in the future.
- >Naming Your Trustee or Trustees
When you create your trust agreement, you will need to appoint a trustee or trustees who will manage your trust. In some cases, people will appoint themselves as trustees until they pass away, at which time another trustee will step in. In other cases, you may decide to select a professional trustee management company to manage your trust as family dynamics often change when a loved one passes away.
Many of our clients choose to create a revocable trust because it provides them with a significant amount of privacy. The probate court process is public, and when you have a will-based estate plan, you risk the public finding out about your assets. On the contrary, when you set up a trust-based estate plan, you can ensure that information related to your assets and property stays private. After you pass away, your loved ones can receive trust assets outside of the court process.
- Money Saved
Finally, using a trust-based estate plan can save you significant assets when it comes to estate taxes. Of course, how much money you can save depends on your unique situation. However, many of our clients do end up saving money by using a trust-based estate plan as they do not have to go through the probate process, which can be expensive.
If you are interested in setting up your living trust, Arnold & Smith, PLLC, can help. Contact us today to schedule your free initial consultation to learn how we can help you protect your private information and your assets.