When you think about the method used to distribute your estate assets you likely think of a Last Will and Testament. Many people do use a Will as the foundation of their estate plan and as their primary distribution document; however, there is another common option – a trust agreement. If you create a trust and a Pour Over Will, all your estate assets should ultimately be distributed using the trust agreement. The Essex Junction estate planning attorneys at Unsworth LaPlante, PLLC explain why you might want to use a using a living trust to distribute your estate.
Benefits of a Living Trust
A trust is a relationship whereby property is held by one party for the benefit of another. A trust is created by a Settlor (also referred to as a Maker or Grantor), who transfers property to a Trustee. The Trustee holds that property for the trust’s beneficiaries. All trusts are first divided into one of two categories – testamentary or inter vivos – the latter of which is more commonly referred to as a living trust. A living trust can be used as your primary method of assets distribution within your estate plan or may be used to achieve a specialized goal within your plan. Among the many benefits of using a living trust t distribute your estate assets are:
- Avoiding probate. A Will must go through the probate process, meaning it often takes months, even years, before the assets gifted in the Will are distributed to the intended beneficiaries. In addition, probating a Will can be expensive, thereby diminishing the value of the estate that is ultimately distributed to loved ones. Assets distributed through a trust, however, are considered non-probate assets, meaning they can be distributed right away without the need to go through probate.
- Protecting the inheritance of a minor child. If you are the parent of a minor child, you likely want the estate you leave behind to provide for your child after you are gone. Your minor child, however, cannot inherit directly from your estate. As such, assets gifted to a minor child in your Will must be managed by someone else until the child reaches the age of majority. If you make those gifts using a trust, however, you get to decide who will manage the assets through your choice of Trustee.
- Keeping the details of your gifts private. You may not be thrilled about the idea of the details of your estate plan being made public. The provisions of your Will, however, will become public as soon as the Will is submitted to probate. A trust agreement, however, does not become public unless the trust is involved in litigation.
- Retained control over how assets are used. Once a gift is made using a Will you have no control over how the gift is used by the beneficiary. With a trust, however, you have the option to use the trust terms to retain a certain amount of control over the assets you gift. For example, your trust terms could require the assets to be used for educational purpose only or could limit distributions based on the beneficiary meeting certain conditions first.
- Staggering distribution. Gifts made using a Will are distributed at the end of the probate process. If you prefer to stagger the distribution of assets you are gifting, a trust is the only way to do that. This is particularly advantageous if you have a young beneficiary or if you are concerned that a beneficiary will squander assets gifted to him/her.
Contact Essex Junction Estate Planning Attorneys
For more information, please attend one of our upcoming FREE webinars. If you have questions or concerns about using a living trust to distribute your estate assets, contact the experienced Essex Junction estate planning attorneys at Unsworth LaPlante, PLLC by calling 802-879-7133 to schedule your appointment today.