Have You Considered Utilizing a Living Trust as an Estate Planning Tool?

July 07, 2012

At a certain age, planning for the disposition of your property after you're gone is more than just the responsible thing to do; it is absolutely essential to protect your family. The most thorough, smoothly functioning estate plans take advantage of the right legal instruments for your unique circumstances.

Likely, you have a basic understanding of a will and what it does. But what about a revocable living trust? Given the right situation, a living trust can offer the kind of control you want now as well as the swift and easy distribution of your assets when you are no longer here to administer them.

A Basic Outline of Living Trusts

A living trust is established while you're alive, and it is "revocable" because you may change it or eliminate it for any reason as long as you're alive. After you die, the trust generally can no longer be changed.

So what, exactly, is a trust? At the basic level, it involves you as the creator, as well as two groups: first, the trustee or trustees you appoint, people who agree to manage your assets under the direction of the terms of the trust (you can name yourself and your spouse as trustees while you're alive); and second, the beneficiaries (those you would want your assets to pass to when you're gone).

As a trustee, if you become disabled or otherwise incapable of managing the assets in the trust, your co-trustee or a successor trustee named by you will step in to fill your shoes. You may name your children or other parties as successor trustees, but if you're not confident family members will distribute your assets according to your instructions, you can name a professional fiduciary (for instance, the trust department of a bank) as successor trustee.

The Advantages of Including a Trust in Your Estate Plan

A living trust is not for everyone, but it can offer several advantages as an alternative to or in conjunction with other estate planning options. For one thing, a trust eliminates the need for your estate to pass through probate court -- which can be expensive and time consuming. In addition, a trust can be written to structure the distribution of your assets however you see fit; for example, it can pass your assets on to your heirs immediately upon your death, or can portion them out over time in amounts that you specify. Finally, a properly-written trust can help reduce estate taxes.

You owe it to yourself and your family to put in place an estate plan that will eliminate hassle and reduce expenses. Contact an estate planning attorney today to learn more about living trusts and other estate planning tools.

Article provided by Gorman & Jones, PLC
Visit us at www.gormanandjones.com