Many Americans believe that an estate plan consists of nothing but a will. While it is possible for some persons to benefit from simple wills, most people would benefit from a more complex estate plan to better suit their financial wants and needs.
This is where the living trust comes in. Benefits of a living trust include protecting minor children and children with special needs, helping your personal assets avoid probate and ensuring that all information stays private.
Protecting your children
One of the biggest benefits to a living trust is that it is more difficult to challenge in court compared to a will. If you are looking to protect the inheritance of your minor children or grandchildren, a living trust makes it more difficult for an outside entity of majority age to try and interfere with a minor’s inheritance.
Additionally, a trust makes it possible for you to designated the trustee(s) to distribute your assets to minor children. For instance, you may wish to have your trust withhold the assets until a major event in the life of a child, such as marriage or attending university.
If you have a child or children with special needs, special needs trusts are very important if you are providing for them. If the government gives the special needs child Supplemental Security Income (SSI) benefits, it is vital to plan inheritances carefully. Failure to do so may mean that the special needs child loses his or her Medicaid benefits in addition to SSI funds.
Avoiding probate
Avoiding probate is one of the major advantages of the revocable living trust. It is important to realize that there are two primary types of living trusts: revocable and irrevocable. If your main interest is avoiding probate, the revocable trust can do this for you.
In order to do this, you first must create and then fund the revocable living trust. In the event that you wished to place real estate into the living trust, you would need to execute a new deed and transfer the title into the name of the trust. You could also do this with checking accounts and other assets.
Once you die, anything in the revocable living trust will not go through probate. Considering that probate is expensive and takes a long time in most cases, a revocable trust is often helpful for surviving beneficiaries.
Keeping it private
Even if you keep your will and testament private during your lifetime, you are not able to do so after you die. For instance, it is not uncommon for celebrity wills to turn up online hours after they die. Many people wish to keep details of their estate plan private even after death. A living trust can do this.
The reason why a living trust is the best option for those who wish to keep their information private is because nobody ever has to file a living trust in court. This means that the probate court has no supervisory role concerning your trustee. The trustee follows the instructions that you put in the trust document without any additional overhead. This is what allows living trusts to remain private.
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A living trust is a versatile, valuable addition to your estate plan. Contact us at AmeriEstate to learn more.