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What are the benefits of a living trust?

| Apr 12, 2021 | Estate Administration & Probate |

Whether you are just starting a family or you are planning retirement, it is critical to ensure your estate plan is current. There are many components to a comprehensive estate plan, including a last will and testament, power of attorney, guardianship designations, beneficiary designations and a living trust.

While some do not have a living trust as part of their estate plan, there are many benefits of having one that should not go overlooked. When properly planned, a living trust can ensure your loved ones are protected and get everything you intended them to receive.

How does a living trust work?

Unlike a last will and testament, which is a legal document stating what you would like to happen to your property, a trust is an entity of sorts. Once you transfer your property and assets into the trust, the trustee resumes control, according to The Balance. You can either maintain your right to move property and assets into the trust during your lifetime, a revocable living trust, or give complete rights to the trust, an irrevocable trust.

What are the benefits?

Once you pass, property and assets transfer directly to those named on your trust, without having to go through the probate process. Other key advantages of having a trust include the following:

  • Manages your money and property
  • Keeps your property and assets safe
  • Maintains your privacy, as trusts are not a matter of public record
  • Eliminates estate taxes in an irrevocable trust

You can determine how you would like the assets in your trust paid out to certain beneficiaries. For example, you can choose to only pay out for a beneficiary’s schooling or make an exclusion that they must wait until they graduate to get the entire fund. If you have a beneficiary with a spending problem, you can allot certain payments over time.

Trusts can be created to safeguard your estate and benefit your beneficiaries after you pass.