Trust Fund
What Is A Living Trust? And Why I Wrote One
1. Introduction: A living trust is a legal document that allows you to control how your assets will be managed and distributed after death. You can use a living trust to:
- Avoid probate.
- Save on estate taxes.
- Provide for asset management in the event of your incapacity.
2. The Benefits of a Living Trust: A living trust can provide many benefits, including:
- Avoid probate — A living trust can be used to avoid the probate process. Probate can be expensive and take time, but if you have a living trust, your property will transfer to your beneficiaries without going through the probate process.
- Protect your assets — A living trust allows you to decide who will inherit your assets upon your death and when they will receive them. You can also protect some of your purchases from creditors in case of lawsuits or other financial troubles.
- Keep private information private — A living trust is not a public record, so it can keep sensitive information from becoming general knowledge. This can help protect you and your family from identity theft.
3. How to Set Up a Living Trust: You can set up a living trust by:
- Decide who will be the trustee of your trust. A trustee is a person in charge of managing the assets in your living trust, including making sure they are transferred to the beneficiaries named in your trust when you die. You can name yourself a trustee, but it’s a good idea to choose someone else if you have doubts about whether you’ll manage your finances well when you’re older or if you have health issues that might impair your ability to make decisions about money matters.
- Decide who will receive what property when the trust ends. The beneficiary is the person who receives property from the living trust at its termination (death). You can also name multiple beneficiaries, such as naming both children and spouses as joint heirs so that each will automatically inherit half of everything left behind when you pass away.
- Appoint an alternate successor trustee if something happens to the first one named on your list before it is time for them to take over for real; this ensures continuity.
4. What Happens if You Don’t Have a Living Trust:
The answer: a whole lot of trouble.
Without a living trust, your assets will be distributed according to your state’s laws — which means that they’ll go to whoever is next in line under those laws. In some states, that might mean your children; in others, it could mean your parents or siblings.
If you don’t want them to receive those assets? Then you’ll need to create an estate plan that specifically outlines how you want them to be distributed. That’s more work than just setting up a living trust and having someone else care for you!
Need help with your living trust? Go to Wills Probate — https://www.willsprobate.co.uk/
