If you want to make sure your loved ones get your assets after you pass, a trust is a great option. Establishing a trust can put your mind at ease while making it easy for the loved ones you leave behind to inherit your money and property.
This article will discuss the advantages and disadvantages of a trust, the different types of trusts, and some important parties in the document you should be aware of when creating your estate plan.
The Major Advantages Of A Living Trust
There are plenty of advantages of a living trust that you should really be aware of, including:
- Avoiding probate: One of the biggest benefits of having a living trust is that probate court will not be an issue. This basically means that your assets will be distributed to your loved ones without a frustrating waiting period. The person that you name as your successor trustee will be the one to distribute your estate to your beneficiaries.
- Control over your assets: A living trust will provide you with complete control over all of your assets. You can add new assets to your trust or remove them at any point in time while you are still alive.
- Avoid conservatorship: If you are ever deemed mentally incapacitated, a living trust will ensure that your assets are handled properly. Your successor trustee will manage your trust in your absence, which should put your mind at ease.
- Everything is private: The details of your trust are never made public, even after you die. This is different from a will. A will must go through probate court. Probate court is a public process which means all of your assets become public in probate. If you value your privacy, this is something to keep in mind.
Disadvantages of a Trust
While there are not many disadvantages of a trust, some of them to consider include:
- Cost: Up front, a trust costs more than a will. However, they can save your estate and your family money in the long run because they won’t need to hire an attorney to help them through the probate process.
- Takes more time to draft: Setting up a trust is more involved than a will and requires you to create a variety of documents for transferring ownership of your belongings. Due to the complexity, it’s recommended that you seek the assistance of a professional trust attorney.
The Difference Between Revocable vs Irrevocable Trust
There are two main types of trusts that you can have set up, revocable and irrevocable. It is crucial that you know the difference between these prior to making a decision. There is most likely one option that is better than the other for you.
Revocable trusts, also known as living trusts, are typically created as a means of avoiding probate, which can be a long and drawn out process that lasts for months or even years. If you want your loved ones to get your assets as soon as possible, this is worth considering.
People also set up revocable trusts as a way of protecting themselves while they are still alive. This type of trust will ensure that someone you know will be in charge of your assets if you are ever mentally incapacitated.
An irrevocable trust is final once it has been signed, which means that no changes can be made, though there are some rare exceptions. People often set these up for family members with special needs or for certain tax or creditor purposes.
These trusts are by far the most complex, so you will need to make a point of hiring an attorney who focuses in estate planning. This way you will know that everything is done properly.
Usually with a revocable living trust, the person who creates the trust is known as the settlor/grantor. While the settlor/grantor is alive, they act as the trustee and all of their assets in the trust just like they do now.
The grantor also elects a successor trustee.
The successor trustee takes over managing the trust and its assets after the grantor dies.
They also distribute the grantor’s assets to their beneficiaries according to their wishes.
You can name pretty much anyone you want to be your trustee.
It is a good idea, however, to pick someone that is mature, responsible, and can be trusted completely.
There are a number of options to explore when it comes to setting up a trust.
It is crucial that you take the time to review your choices before making any final decisions.
This will ensure that you and your loved ones are covered in any circumstances that might arise whether you become incapacitated or pass away.
Make sure that you also hire a qualified attorney to put your trust together. If you are interested in drafting a trust and would like to set up an initial consultation with an experienced trust attorney, call Rochester Law Center today – (248) 613-0007.