Does Your Retirement Plan Include a Living Trust?

Mar 14, 2023
Living Trusts
Does Your Retirement Plan Include a Living Trust? | AmeriEstate Legal Plan

One of the best things you can do for yourself and your family is to plan for retirement. This includes saving money and also thinking about how you will use that money once you retire. One retirement planning tool that is often overlooked is the living trust. A living trust can be a great way to manage your assets and ensure that your wishes are fulfilled after you die. A living trust has many benefits and can help you in retirement.

What is a living trust?

A living trust is a legal document that outlines how you would like your assets to be managed in the event that you become incapacitated or pass away. For example, if you have minor children, you can specify in the trust agreement that their inheritance will not be distributed until they reach adulthood. You can name a trustee to oversee the trust and determine how and when assets will be distributed to beneficiaries.

How does a living trust work?

A living trust is a legal document that allows you to control how your assets are distributed after you die. You can use a living trust to:

  • keep your assets out of probate
  • protect your assets from creditors
  • reduce or eliminate estate taxes
  • provide for asset management if you become incapacitated

To set up a living trust, you need to transfer ownership of your assets into the trust. Once the assets are in the trust, the trustee will manage them according to your instructions. When you die, the trustee will distribute the assets in the trust according to your wishes.

There are two types of living trusts: revocable and irrevocable. A revocable trust can be changed or canceled at any time, while an irrevocable trust cannot be changed once it has been created.

What are the benefits of having a living trust?

Regardless of trust type, there are a lot of advantages to having a trust. Some benefits of having a living trust include:

  • Avoiding probate: Probate is the legal process of distributing your assets after you die. If you have a living trust, it can distribute your assets to your beneficiaries without going through probate. This can save time and money, as well as keep your affairs private.
  • Managing assets if you become incapacitated: If you become incapacitated, someone else will be able to manage your assets according to the terms of the trust. This can give you peace of mind knowing that your affairs are in order and taken care of.
  • Help minimize taxes: A living trust can help minimize estate taxes and other taxes on your assets.
  • Can be used for asset protection: A living trust can protect your assets from creditors and lawsuits.

Why a living trust should be a part of your retirement plan

If you’re like most people, you’ve spent a lifetime planning for retirement. But have you considered how best to protect your hard-earned savings? A living trust can be an important part of your retirement plan, providing a number of benefits.

 First, a trust can help you avoid probate. Probate is the court-supervised process of distributing your assets after you die. It can be time-consuming and expensive, so avoiding it can be a big plus.

Second, a trust gives you more control over how your assets are distributed after your death. With a will, you can only specify who gets what; with a trust, you can also specify when and how they get it. For example, if you have young children, you may want to put conditions on when they inherit, such as when they turn 18 or finish college.

Third, a trust can help protect your assets from creditors and predators. If you become incapacitated or die without a trust in place, your assets may be subject to claims from creditors or others. But if they’re held in a trust, they’ll be out of reach.

Fourth, trusts offer privacy. The probate process is public; anyone can see who inherits what and when. But with a trust, the details remain private.

Finally, trusts offer flexibility. You can change the terms of the trust at any time as long as you’re alive and competent. So if your circumstances change, you’re still able to make adjustments to your trust.

If you are considering setting up a living trust, it’s important to ensure that it is properly created and funded. Contact AmeriEstate Legal Plan and schedule a free consultation with a Trust Advisor to get started.