A Living Trust is a legally-binding document that essentially holds title to your assets to simplify the distribution process after your death.
As the person creating the Trust, you are known as the Grantor and should you choose, can also be the designated Trustee, the person responsible for managing the Trust. This allows you to maintain complete control over your assets, even though they are no longer titled in your name.
The Trust also has designated beneficiaries. While you’re alive, you can be the beneficiary and continue to receive any income the assets in your Trust might generate. After you pass on, your heirs can become the beneficiaries and inherit the assets in your estate as laid out in your Trust document.
A Trust can also help you avoid probate, as any assets held within the Trust can be passed directly to the beneficiary without having to go through Probate court. Any property not held within the Trust at the time of your death is still subject to probate.
It can protect you if you’re disabled by allowing a Successor Trustee of your choosing to manage your assets for you, in accordance with the terms of your Trust.
Living Trusts are completely revocable, meaning that they can be changed and/or revoked at any time while you’re alive. Once you pass on, the Trust becomes irrevocable (it can’t be changed) and the assets are held or distributed in accordance with your instructions.
There are of course, a few drawbacks to a Living Trust. Because you maintain control and access to your assets, the Trust cannot protect your estate from creditors or lawsuits.
In addition, Trusts can be more expensive to set up than a Will and may require some additional maintenance costs as well.
To find out if a Living Trust is right for you, contact our office today.
Michael Robinson, Estate Planning Attorney
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