If you are thinking that you are going to draw up a will at some point, you are not alone. This being stated, you may want to consider a living trust as an alternative.
This legal device provides a number of different profound benefits, and we will explain them in this post.
Revocable vs. Irrevocable
Some people assume that you surrender personal control of assets that you convey into a trust. That’s the whole point, right? You want to create separation between you as an individual and the assets that you are conveying to the trust.
This is true when it comes to irrevocable trusts, but the revocable living trust is in a different category. As the name would indicate, you can revoke or dissolve the trust after it has been created, and you would act as the trustee while you are alive and well.
Streamlined Estate Administration
One of the benefits of a living trust over a will is the efficient estate administration. You convey the assets that will comprise your estate into the trust, so there would be consolidation of ownership. This simplifies the process for the trustee.
Another major positive is the avoidance of probate. A will would be admitted to probate, and the court would supervise while the estate is administered. This process is time-consuming, and no inheritances are distributed until the estate has been closed by the court.
Probate expenses reduce the amount of the inheritances that will be received by the heirs. Plus, the records are available to the general public, so there is a loss of privacy.
Assets that are distributed through the terms of a living trust are not subject to probate, so the trustee can act without court supervision.
Inheritance Safeguards
Unless a testamentary trust is contained within a will, the people that are named as beneficiaries receive lump sum bequests. There would be no safeguards, so someone that is not good with money could burn through their inheritance too quickly.
If this is a source of concern, a revocable living trust can provide you with peace of mind. You can include a spendthrift provision, and the trust would become irrevocable after your death.
The beneficiary would have no access to the principal, and their creditors would “step into their shoes”. They would not be able to reach the resources either, so the assets would be protected.
When you have a living trust, you can instruct the trustee to distribute assets in any way that you choose. For example, you can stipulate the distribution of a certain dollar amount each month, or you can provide distributions of the trust’s earnings broken up into monthly increments.
Comprehensive Solution
Even if you have a living trust, you may still be in direct personal possession of property at the time of your passing. To account for this, you can include a pour-over will in your overall estate plan.
This type of will would facilitate the transfer of the assets into the trust after you are gone, so the trust would be the centerpiece of a comprehensive estate planning solution.
Incapacity Planning
A significant percentage of elders become unable to manage their own affairs. Alzheimer’s disease and dementia strike many. There are also physical ailments that can make it difficult to handle your affairs effectively.
You can account for this when you have a living trust. When you are drawing up the trust declaration, you can name a successor trustee to administer the trust after your death. This individual can also be empowered to step into the role in the event of your incapacity.
Access Our Estate Planning Worksheet!
We update this blog regularly so there are many posts to explore. We invite you to use it to build on your knowledge. Plus, in addition to the blog, we have other written materials that you can access free of charge.
One of them is our estate planning worksheet. It has been carefully prepared to help you understand the process more thoroughly, and it is being offered free of charge right now.
To get your copy, visit our worksheet access page and follow the simple instructions.
Need Help Now?
If you are ready to work with a Chico, California estate planning lawyer to put a plan in place, we are here to help.
We know that some people are reluctant to discuss personal matters with an attorney they just met. This is fully understandable, and we can relate on our end.
Since we can empathize with these feelings, we go the extra mile to treat people the way that we would want to be treated if we were in their position. You will receive attentive, personalized attention every step of the way when you work with our firm.
The personalized part is very important because each situation is different. There is no cookie-cutter, one-size-fits-all estate plan that is right for everyone. At your consultation, we will learn about your situation and your objectives so we can make targeted recommendations.
You can call us right now at 530-343-3454 to set the wheels in motion. If you would rather send us a message, fill out our contact form and we will get back in touch with you ASAP.