During the estate planning process, most people consider including a living trust. This legal fiduciary arrangement allows you (the testator) to set up your assets to be managed by a third party (the trustee) on behalf of your beneficiaries.
Once you have set up your living trust, you can alter or change its terms as well as the beneficiaries. You can also cancel the trust. Here are valid reasons why should include a living trust in your estate plan.
You can by-pass probate
This is, perhaps, the most noticeable advantage of a living will. And this is important for three reasons. First, the probate process can be quite costly. The legal fees, executor fees, inventory fees and other costs associated with the probate process can eat into your estate leaving your beneficiaries with a depleted inheritance. Second, the probate process can be time-consuming especially there are disputes concerning the distribution of your assets. And, third, probate is a public process, meaning anyone can access and what you owed and how your assets are distributed.
You retain post-humus control of your finances
A living trust allows you to continue protecting your loved ones even after your passing. A living trust allows you to hold off the distribution of your assets until the beneficiaries attain certain milestones in life like graduation or marriage. For instance, you can specify in your trust that your children will receive 20% of their inheritance upon graduating from high school, 20% upon graduating from college and the remaining 60% when they get married. Thus, you can use a living trust to protect your young children from the unpredictable challenges they may face when they grow up.
There are many options for estate planning, and trusts are one possibility. If you’re ready to work on your estate plans, it’s time to learn more.