Most everyone realizes that it’s important to have a legal document drafted that outlines the distributions of your assets at the time of your death. This helps ensure that your wishes are honored, and it makes life a bit easier for family members and beneficiaries. Without this important document, the court has a big say in what happens to your assets. While a will is the document most people think of, consider the importance of a living trust. There are many advantages to a living trust, and this post will outline some of the important ones.
Revocable or Irrevocable?
You can create both irrevocable and revocable trusts at any point in your lifetime. A revocable living trust provides privacy, flexibility, the ability to plan for a disability and the ability to avoid probate. The terms of a revocable trust can be dissolved any time you wish. This includes changing beneficiaries, assets and the trustees.
Revocable trusts also help you plan for the possibility of a mental disability by allowing a disability trustee to manage the trust. This is someone who is a trusted individual, and this allows you to have a say in the management of the trust, as opposed to a court-appointed guardian.
Many types of irrevocable trust address certain situations and needs. This includes shelter from creditors or bypassing the assets to pass to spouses without taxes. Generation-skipping trusts also save assets for you grandchildren and later descendants, while life insurance trusts pass the funds from a life insurance policy directly to the policy’s named beneficiary without tax implications.
To learn more about how a living trust can benefit you and your circumstances, contact us. We’ll help you determine which type of trust works best for you.