What a Living Trust Can Do for You
by Michael Kling | March 14, 2019
Most people have heard about trusts and probably know they come from the estate planning arena. The details of why to have one and what they do, however, are often unclear. Here are a few points to clarify what trusts do and how you can benefit from having a trust.
A living trust is created during your lifetime, becoming enforceable once you sign the documents. These trusts can be revocable or irrevocable. If revocable, you can change or revoke the trust at any point during your lifetime. If irrevocable, the trust (generally) cannot be changed once it is signed.
The “fun” part of trust planning is that your trust can be tailored to meet your goals and desires. A qualified estate planning attorney will address the issues that concern you and create a trust that specifically suits your needs. Here are some of the things a living trust can do:
- Save probate costs and reduce estate taxes. By properly funding your trust (transferring assets into the trust), you can avoid probate costs for administering assets upon your death. If trust provisions are properly set up to maximize the use of exemptions, a married couple can save substantially on estate taxes.
- Protect your children. Your trust can hold money for minor children until they are responsible enough to manage it themselves. Often, it is preferable to limit outright access to funds in order to protect inherited wealth from creditors, including a future ex-spouse.
- Save your grown-up kids from themselves. If you believe a child will never be able to manage money him/herself, a trustee can hold funds in trust for the child’s lifetime, distributing money as needed for the child’s health, welfare, and maintenance.
- Ensure your family’s privacy. With just a will, or with assets that must be probated, your affairs will become part of a public record, including details such as the value of your assets, and often, an inventory listing your assets. A living trust, on the other hand, is a private document that is administered by the trustee you have selected.
- Protect you while you are alive. If you fund your trust and later become incapacitated, your successor trustee will be able to manage the trust assets for your benefit. This is especially important for anyone who is single, and for those who have no children. Although you may lack an immediate family member to step in, you still have in place the method and means to be provided for in the event you are unable to make decisions for yourself.
At Kling Law offices, our goal is to help you achieve the peace of mind you deserve by planning for both life and death in a way that addresses and protects your needs, your assets, and your family. Contact our office today to set up your free consultation to discuss how a living trust can help you plan for your future.