It is time again to get back to basics.
You want an estate plan, but why go to the trouble of setting up a living trust?
It may not be a good fit for everyone, but a living trust provides several advantages over a will during the lifetime of the trustor, and after death the beneficiaries may save hassle and expense in a big way.
The lifetime benefits of a living trust are, first, if the document is properly drafted, a successor trustee can step in and manage assets when the trustor becomes incapacitated. Your money can be used for your benefit, without the complications of naming family members as joint account holders. Second, the ability of a designated successor trustee to step in can be a protection against undue influence.
After death, a living trust makes possible the transfer of assets from the trustor to designated heirs without the necessity of probate court supervision. In general, probate is necessary in California when a decedent dies with assets worth $100,000 or more. We will cover the reasons why you may want to avoid probate in an upcoming post.
A living trust also has many of the benefits of a traditional will. A living trust is flexible. It can be changed or revoked during the trustor’s lifetime. A trustor can also specify that the assets will continue to be managed by the trustee after death for the benefit of designated beneficiaries. This can be valuable where beneficiaries are not capable of managing their own money, such as in the case of minors, those who are incapacitated, or others who just need help managing their assets. A living trust can also incorporate strategies to reduce estate taxes.
If you are still unsure whether a living trust is right for you, talk to an attorney. Most will let you know without obligation whether it is a good fit.
This post is a follow up to the previous Estate Planning Basics post, What Is a Living Trust?
Be informed. Knowing the basics of estate planning is essential to creating a plan that actually carries out your wishes. It’s your life and your legacy. It should be your plan.