You want the best for your family, especially when it comes to estate planning. The right estate planning tools, well-crafted by an attorney, may yield great returns for your family even after you’re gone. Trusts are one of the most popular estate planning tools, and for good reason.
A trust is an arrangement created by a trustor, who names a trustee to manage the trust assets and at least one beneficiary of the trust. There are several types of trusts, each with its own purpose.
Some trusts are created after an individual’s death by the terms of their Will. A revocable living trust, however, is established during the trustor’s lifetime. Typically, the trustor will also serve as trustee and will continue to receive income from the trust until death.
As with any process, there are advantages and disadvantages. Reasons to establish a revocable living trust include:
- Distribution is Spread Out: The trust can be set up to disburse in increments. This means your heirs will not receive a large lump sum, something that may prove troublesome for some heirs.
- Avoiding Probate: Trust assets generally pass directly to beneficiaries according to the terms of the trust. Unlike assets passed through a Will, trusts do not have to go through probate. Administration of a revocable living trust, then, is often easier than settling an estate that is Will-based.
- Business Succession and Incapacity: Business assets made part of a revocable trust are still under your control. However, if you become incapacitated, your successor trustee can take over.
- Privacy: Trusts afford a privacy that Wills do not. Because trusts are not part of the probate process, their terms don’t become public record, as do Wills.
Many people feel a great sense of relief and peace after putting together their estate plans. We are here to help.