There have been many advertisements touting the benefits of creating a living trust, many intimating that every estate needs one. Just to quickly review how a living trust works:
- A living trust is created by a Grantor, who names a Trustee to manage the trust’s assets. In many cases, the Grantor can also be the Trustee, as well as the initial Beneficiary of the trust.
- On the receiving end, the Beneficiaries are the heirs that will benefit from the Trust once the Grantor has passed away.
- The Grantor funds the trust by transferring ownership of property, such as real estate or stocks, to the trust.
- Upon the incapacitation or the death of the Grantor, a successor Trustee takes over the Trustee duties, managing the property for the named Beneficiaries according to the terms of the Trust.
Living trusts are not for every estate, but three types of estates that may benefit from creating a living trust generally include:
- Estates that need a mechanism to manage property later in life should a Grantor become incapacitated and no longer be able to handle their finances on their own.
- Estates that need an estate planning tool that allows property to avoid probate. Estates that own property in other states may need to avoid probate in order to avoid having an ancillary probate proceeding for each state the Grantor owns property in.
- Estates that wish to keep finances and property ownership private, as the probate proceeding takes place in probate court, which generates a public record.
An estate planning lawyer can work with you to determine the best tools for your specific needs, and help you put together a comprehensive plan that meets your family’s goals to manage finances later in life, as well as, ease the burden of your passing on your loved ones.
Clients notice Michael Robinson’s unique approach to his estate planning practice the minute they walk through his office doors.
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