Nowadays, many people prefer a revocable living trust over joint ownership or creating a will for their estate plan. They like the benefits of time and cost savings, along with the added control they get with a living trust over their assets.
What is a Living Trust?
A living trust, also known as a revocable or inter vivos trust, is a legal document that allows you to place your assets into a trust. It is established during your lifetime and can either be irrevocable (difficult to terminate or change) or revocable (can be terminated or changed). But in a majority of the cases, living trusts are revocable. They are one of the best estate planning tools because they provide benefits while you are alive, and then are transferred to the beneficiaries you have selected after your death within a short period, saving them from the hassle of going through a probate.
How to Create a Living Trust?
There are three parties involved in establishing a trust:
- 1. The grantor – the person who is creating a trust for their assets.
- 2. The beneficiary – the person who will receive the benefits of the assets.
- 3. The trustee – the person who will get the responsibility of handling the assets.
The grantor has the power to designate the beneficiaries and trustee. They have the option to either name themselves as the beneficiary and/or trustee, or choose another person as a trustee and transfer the assets to them. For creating a trust, the grantor should:
- Designate at least a beneficiary and a trustee
- Sign the trust document
- Have the document notarized
After the trust has been established, the rights to the assets and their maintenance will be given to the beneficiary and trustee. However, in case of a revocable trust, the grantor has the authority to revoke the trust or make changes.
Advantages of a Living Trust
There are several advantages of creating a living trust. The most prominent benefit is that it avoids the probate process altogether. This means that your assets will be distributed among your designated beneficiaries within just a few weeks, which in the case of a will could take months or even years. The trustee will take care of all your debts and distribute the remaining assets among your heirs as per your instructions.
Another benefit of a living trust is that it provides privacy at the time of distribution of assets. When you have a will in place, the case is taken to the court and the assets are made public, and all transactions done get on public records. Moreover, if you have become incapacitated or encountered a disability, a living trust allows your trustee to take control of your assets.
Creating a living trust is a complicated matter and shouldn’t be done without professional help. It is best that you hire an experienced estate planning attorney who can help you understand how living trusts work and the benefits you can receive from them. For in-depth information, contact the Law Office of John C. Grundy at 330.637.9030 or online to schedule your consultation today.