Living trusts can help protect your family during your life and after you have died. Unlike a will, living trusts allow your successor to administer the assets placed in trust if you become incapacitated. Important decisions often need to be made when time is of the essence. Many times during a crisis another crisis comes along. Your family may not have the time and resources to appoint a guardian for you during a period of incapacity. With a living trust the successor trustee can make the call as needed.
If you were to die, a will needs to go thru the probate process where all claims against the estate must be settled before any assets are transferred to the beneficiaries. This can be a lengthy process depending on the number of claims against the estate. Probate also needs to happen in every state where you have assets. Some of you may have time shares in more than one location. That interest for one twenty-sixth of a small property or whatever fractional ownership can delay the entire process. Your executor may need to personally travel to each area and minimally will need to provide accounting and legal information to all jurisdictions.
A living trust eliminates many of these steps and allows a more rapid distribution of assets upon your death. It does not change your tax status. You will continue to pay all federal and local income taxes in the same manner during your lifetime. This is also true for any estate taxes upon your passing. Any valid claims against the estate must be honored by the trust. Your advantages come with the flexibility the trust can afford your successors in administering your assets when you are not able to do so.
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