How much do you know about end-of-life planning? Planning your inheritance will allow you to distribute their belongings according to your wishes after your departure. That’s why you shouldn’t ignore making related documents as soon as possible.
Many people assume that a will is the only estate planning document they will ever need. That’s not true! There are several estate planning documents besides your will, such as a living trust. This document gives property owners more control over their assets than a will. For this reason, we’ll look into a living trust’s benefits.
Important facts about living trusts
Let’s review the basics of these two estate planning documents. Experts define your will as a document explaining how you prefer your estate to be distributed after you have passed away. You write down the names of your beneficiaries, and that’s how the future of your inheritors becomes secure. On the other hand, a trust is a fiduciary relationship in which you (the trustor) give another entity (the trustee) the right to hold your assets for the benefit of your beneficiaries. Can you become the trustee as well? Yes. Just add another name to serve as the trustee after your demise. Listed below are some details about a living trust. Read everything we’ve stated below to know more about this matter:
- Revocable versus irrevocable
First, let’s talk about two basic sorts of living trust you can create. Remember that after a living trust has been created, the trustee controls the trustor’s assets on behalf of the concerned beneficiary. But can you change or revoke a trust? Creating a revocable trust means the trustor may cancel it as long as the trustor is competent enough. However, canceling an irrevocable trust requires you to bring a court order and receive the approval of all beneficiaries. So, this one is less flexible.
But how to set up a living trust today? You can visit websites that allow you to create a living trust online. These websites offer basic assistance and help you finish the job by saving time and money.
- Getting a lawyer
If you prefer getting legal help while creating a living trust, contact an attorney for this purpose. So, you can create properly-drafted living trusts after hiring a lawyer. They will help you remove anything illegal or unclear from your estate planning documents, thus making these papers undeniable in court.
- Quite inexpensive
How much does it cost to create a living trust? It costs less than it costs to create a will; even lesser when you’re doing it online. This option is more affordable for people who seek a cost-effective estate planning solution.
- Your trustees
We have explained that the trustor grants control of their assets to the trustee. This trustee controls these assets for the benefit of the concerned beneficiaries. You can insert some conditions for your beneficiaries. For instance, you may require your beneficiaries to complete their education, after which they can inherit your assets. But what about trustees? Mostly, people become trustees in any living trust they have established. Then they shall make their spouses co-trustees and their children successor trustees. Make sure that these trustees are reliable people because the living trust makes them the legal owners of the assets you have put in that living trust. So, choose carefully.
- Flexible terms
A revocable living trust gives owners more flexibility than an irrevocable living trust. You can change the terms of this living trust and even cancel it as long as you are doing good mentally. However, making significant changes – such as disinheriting someone – requires you to bring a trust restatement. Otherwise, a trust gives people more freedom than a will does; you can put some conditions on your beneficiaries if they wish to become heirs.
- A will’s limitations
What makes older Americans trust creating a trust more than a will? A will goes through a process called probate. This process is necessary to determine the will’s validity, after which your heirs can assume control of your assets. However, trusts are better than wills because of these reasons:
- A living trust doesn’t go through probate
- The contents of a living trust will remain private
- A living trust becomes active the moment it’s created
- Dying intestate
A person who dies without creating estate planning documents dies intestate. In this case, your heirs won’t receive their share until a court determines the identity of your legitimate successors. So, a court may assign someone you don’t like as your estate manager or your kid’s guardian after your demise. That’s why you must create these documents.
- Good for couples
Couples can benefit from creating a living trust because they can make their legal partner the co-trustee. Experts suggest a joint living trust for married couples when both partners jointly own a piece of property and wish to inherit it when one dies. In this arrangement now, both partners become co-trustees. When one of you dies, the other shall become the sole trustee. So, your fiduciary interests shall remain secure in this arrangement today if you are married to someone.
- Updating the trust
A living trust must be constantly updated. Remember that circumstances change, and you must make appropriate amendments to your estate planning documents with time. However, you can’t change an irrevocable living trust because it’s supposed to be resistant to amendments. However, people shouldn’t hesitate to change a revocable living trust after births, deaths, and divorces.
Conclusion
Recently, journalists showed that just one-third of Americans have well-established estate planning docs explaining the distribution of their properties. This article lists some factors you must know about creating a living trust. A trust gives you more control over the distribution of the assets you own and doesn’t go through probate. It’s relatively inexpensive to create than a will and has flexible terms. You can name yourself as a trustee and some other people who shall manage your property on behalf of your beneficiaries after your demise. Contact some lawyers to create it or visit a website where you can create a trust online. That’s how you can secure the future of your heirs.