Meaning of Living Trust
Living Trusts are documents created by a person known as a “Grantor/Initial Trustee” who puts property into a Trust and enjoys the benefits of it during their lifetime. Upon the death of the grantor, the property is managed by another person called a “Successor Trustee”.
The people who inherit the Trust property upon the death of the Grantor are the “Beneficiaries”.
In Living Trust, Grantor has full control over the property and can enjoy the property till he dies by naming himself/herself as the Initial Trustee. After the Grantor's death, the Trust Property administration is dealt with by the Successor Trustee; in this way, the Successor Trustee works similarly to that of an Executor of a Will.
Other Benefits of a Living Trust
Apart from avoiding Probate and Conservatorship, Living Trusts provide the following benefits.
- Protects your privacy
Unlike Wills, Trusts are private documents. Since there is no intervention of courts in assets distribution, the Trust document is not made a Public record. No one can ever find out more about your distribution of assets by searching public records.
- Protection of Minor Children
If you have minor children, you might not want them to get ownership of your estate at a small age. You may include it in your trust that you want your minors to receive the property after attaining a specific age. For eg. at the age of 25 or 30 years.
- Reduce estate taxes
Some of the Irrevocable Living Trusts can help you avoid Estate taxes. For example, AB Trusts.
Estate Tax is applicable at the federal as well as State levels in some states. So, even if you are exempted from Federal tax, you might be required to pay the state-level tax in some states.
- Ensure the Privacy of your Document
Since Living Trusts avoid probate, they do not become public records like Wills. No one will have the access to your Trust at any stage to know about your distribution.
Last Wills are subjected to the Probate process and the document becomes a public record soon after the death of the testator.
- Protects you in case of Illness or Incapacity
Apart from specifying the distribution of your assets/property after your death, may also include the steps to be taken care in case of any unanticipated situation like illness or unconsiousness of yours when you are not able to communicate your wishes.
Do I need a Living Trust?
Making a Living Trust as part of your Estate Planning provides a hassle-free and simple method for the distribution of assets among the loved ones of a person after death. A Living Trust also allows people to enjoy the benefit from the trust property during their lifetime.
Apart from this, there are many other benefits offered by a Living Trust. These include:
- Avoids Probate
- Protects your privacy
- Protection of Minor Children
- Ensures the Privacy of your Document
- Protects you in case of Illness or Incapacity
Read more about Living Trust and its benefits.
If you are still confused as to what will suit you best as per your needs; you can connect with an Estate Planning attorney on TrulyWill for support and guidance and discuss your requirements.
