What You Need To Know About Living Trusts
Typically, the living trust is the hub of an integrated estate plan. The living trust is called a “living” trust because it is a trust you create and fund while you are living. While there are many types of trust, in the vast majority of cases clients will create a revocable living trust, which allows the trust maker (also known as the “Settlor”) complete control of their assets while living and competent. If the Settlor becomes incompetent or dies, a successor trustee takes over and manages the Settlor’s trust property as directed by the trust document. There are often layers of decisions that go into your living trust: decisions most people never even consider. For your comprehensive living trust, you need experienced legal help.
At our firm, Radiant Probate & Estate Law, Inc., in Palo Alto, our knowledgeable estate planning attorneys can explain the benefits of a living trust and whether one may be right for you. With your best interests at heart, we provide detailed attention while helping you create a thorough integrated estate plan.
A Living Trust Has Certain Advantages Over A Will
A revocable living trust has a few elements working in its favor. For example, a living trust allows you to:
- Seamlessly manage assets during your lifetime whether you are competent or incompetent. A Will only provides for management of assets at death.
- Avoid the costly and time-consuming probate process that occurs with a Will.
- Maintain privacy. Unlike probating a Will, a trust administration is a private process.
- When you transfer your assets to a living trust, they are held in a form that avoids the probate process, but they are still managed and taxed as your personal assets over which you have full control.
There are some crucial things to understand about living trusts: First, the assets within a living trust are not protected from creditors. Second, you should consider a living trust as one (important) part of an overall integrated estate plan.
Though you may have a trust, you still need a will. The “pour-over” will, allows you to name a guardian for your minor children. It also acts as a backup in case you did not title assets in your trust, because the pour-over will directs that assets you did not title in the trust should go into the trust after the probate process.
The final property management document in an integrated estate plan is a durable power of attorney for finances. This document allows your designated agent to manage your non-trust assets for you in the event you become incapacitated. Together, the living trust, pour-over will, and durable power of attorney for finances combine for the management of your assets at all stages of life.
Learn More About Wills And Trusts Issues
Visit these pages to learn about special issues that often come up in probate:
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