Before we address the subject that serves as the title of this post, we will provide some general information about living trusts. When you understand the benefits, you will see why a living trust may be the ideal centerpiece of your estate plan.
Asset Consolidation for Streamlined Estate Administration
When a will is used, the executor that is named in the document would be forced to identify and inventory the assets that comprise the estate. Since there is no consolidation of the assets, this can be a tedious and inefficient process.
On the other hand, if you facilitate asset transfers through the terms of a living trust, the trustee would step into a turnkey situation. The assets would be owned by the trust, and they would be clearly listed on a schedule.
You can include a letter of last instructions to provide additional practical information that the trustee will need to complete the administration tasks.
Another efficiency factor is the avoidance of probate. A will would be admitted to probate, and the court would provide supervision during the administration process. There are rules that must be followed, and the process will take close to a year to run its course if things go well.
The trustee of a living trust does not have to jump through all the procedural hoops, because the distributions to the beneficiaries would not be subject to probate.
Control and Flexibility
You would act as the trustee if you establish a revocable living trust, and you would name a successor to assume the role after your passing. There would be no loss of control of the assets that you convey into the trust, and you would be able to change the terms at any time.
Another benefit is the ability to dictate the distribution schedule. If you want to provide distributions on a monthly basis over an extended period of time, you can state these wishes when you draw up the trust.
The principal would be protected from any creditor claims that may be initiated by the beneficiaries’ creditors, and this is another benefit.
Though it is not a very pleasant subject to consider, many elders become unable to handle their own affairs at some point in time. To account for this possibility, you can name a disability trustee to manage the trust in the event of your incapacity.
Pour-Over Will and Guardian Designation
Now that we have provided the necessary background information, we can get to the point of this post. Even if you have a living trust that has been funded, you may still have property in your direct personal possession at the time of your death.
To account for this, you should include a pour-over will in your estate plan. This would facilitate the transfer of these assets into the trust.
A will can also be used to designate a guardian if you have a dependent, and this is another important consideration.
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At some point, you will learn enough to know that it is time to work with an attorney to put an the state place. If that time is now, we can gain an understanding of your objectives and help you devise a custom crafted plan that covers all of your bases.
You can set the wheels in motion if you give us a call at 802-879-7133, and there is a contact form on this site you can use to send us a message.