Estate planning is a complex and important process to proactively engage in as you age. It involves developing a plan for how your assets will be distributed after you pass away — and what that will look like varies widely from person to person.
One option that families can turn towards to ensure that their wishes are respected after they pass is establishing a living trust. Also known as a revocable trust, this legal document does not replace a will, but instead allows you to transfer ownership of your assets to a trust while you’re still alive. You’ll name a trustee to manage the assets, and designate beneficiaries that will inherit the assets held in the trust after your death.
Considering the following factors will empower you to make the decision that’s right for you and your loved ones. A living trust could be a smart choice for you if:
- You want to avoid the probate process. Often costly and time-consuming, probate takes place to settle the estate of a deceased person. A living trust circumvents this process, as the trust is a legal entity that owns the assets rather than an individual.
- You want to keep your finances private. During the probate process, documents filed with the court like a will or inventory of assets become public record. The living trust is a private document, so the details of your estate will never become available for public viewing.
- You have a unique family situation. For families with a high net worth or complicated inheritance plans, the living trust allows you to explicitly designate how you want your assets to be distributed. And because the document is revocable, you can amend or revoke it at any time.
- You have the time and money to invest in developing the living trust. The upfront costs of developing and maintaining the trust can be significant. However, it is often a wise long-term investment, as it can eventually reduce the estate taxes and legal costs after your death.
Enlisting the guidance of a seasoned legal professional can help you smoothly and strategically navigate the process of creating and managing a living trust. For guidance on navigating establishing a living trust and other estate planning matters, contact us.
Related practices: Estate Planning, Divorce & Family
