Living trusts are an important tool in the estate planning toolbox. This term refers to a number of different estate planning products, each with their own purpose and advantages. It is important for individuals who think they may benefit from a living trust to learn exactly which type of living trust might serve their particular needs.
In general, living trusts are desirable because they allow the creator to maintain a degree of control over the assets held within them, while sacrificing some other protections for this flexibility.
In general, consumers usually use living trusts to help avoid the probate process after their death. Probate is the system put in place to distribute a person’s property to his or her beneficiaries after death if that person did not make other arrangements to direct certain property to certain beneficiaries. Probate can take a long time to complete and may eat up some of the value of the estate in the process.
However, living trusts do have some drawbacks. People often choose them so that they can reduce their estate within their lifetime but still maintain some control over the assets within the trust. In return for this flexibility, living trusts do not usually offer as many protections as other types of trusts that offer less flexibility to the trust creator. For instance, some creditors may still be able to pursue payment for debts through assets held within a living trust.
If you think that living trust may be the right tool for your needs, be sure to consult with an experienced attorney about how to create and administer a trust that truly meets your needs. An experienced attorney can help you understand each of the advantages of various types of living trusts and make sure that you choose the living trust that fits your goals.
Source: Findlaw, “Living Trust Information,” accessed Sep. 29, 2017