If you are new to the estate planning process you probably don’t know a lot about trusts, or living trusts in particular. While your estate planning lawyer will be able to walk you through the trust creation process and explain to you in detail how different trusts benefit you, you can do a lot to educate yourself about the basics of how living trusts work and why you might want one.
Creating Your Own Fictional Entity
A living trust really only exists on paper. But unlike a novel or other piece of fiction, courts will recognize a living trust as a legal entity, meaning they can own property. Because of this, a living trust becomes especially useful when it comes to specific property concerns, such as passing your property to others after you die without the necessity of having to go to probate court first.
When you create a trust you will have to identify key people, such as the trust’s manager, known as the trustee. This person will be responsible for taking care of the trust property and ensuring that the other people you identify—the beneficiaries—get to use the property in accordance with the terms you have chosen. In most cases, you will be your own trustee.
Reaping the Benefits of Privacy
One of the great benefits of a living trust is the ability to protect your privacy and save money by avoiding probate expenses. After you die, some of your property can only go to new owners after it passes through the probate process. By creating a living trust and giving your property to the trust to own, you avoid the prying eyes and potential costs of probate.
- Business Succession Planning May Be Easier than You Think - June 1, 2022
- Estate Planning – Something You Shouldn’t Do Yourself - May 18, 2022
- Just When You Thought You Understood the 10-Year Rule, Think Again - May 11, 2022