What Are The Benefits Of A Living Trust?
Living trusts offer several benefits, making them a popular choice for estate planning, including:
- Flexible: The usual living trust provides that the grantor retains the right to amend or revoke the trust at any time.
- Controlled beneficiaries: The trust usually provides that all of its income and principal can only be used for the grantor's benefit. Also, provides a clear plan for managing and distributing assets according to the grantor's wishes, which can help prevent disputes among heirs.
- Incapacity Planning: If the grantor is not able to serve as trustee, a successor disability trustee would take over management according to the terms of the trust. This means that there would be no need for any kind of legal guardianship proceeding.
- Avoids Probate: Assets in a living trust generally bypass the probate process, which can be time-consuming and costly. This means quicker and more private distribution of assets to beneficiaries.
- Facilities for married couples: In the case of a married couple, a Joint Living Trust would have both spouses named as the grantor, trustee, and beneficiary. Upon the death of one spouse, the surviving spouse would continue to act as sole trustee. Upon the death of the grantor, or in the case of a married couple, both grantors, the trust would have the same sort of dispositive provisions written into it that would normally be found in a will.
- Privacy: Unlike wills, which become public records during probate, living trusts are private documents. The details of your assets and distributions remain confidential.
How Do I Create A Living Trust?
As creating a living trust involves several key steps, Dorko Wealth & Estate Planning can help you with this process.
- Draft the Trust Document: Work with a living trust planning attorney to create the trust document outlining terms and conditions.
- Fund the Trust: Transfer ownership of your assets (such as real estate, bank accounts, and investments) into the trust.
- Sign and Notarize: Execute the trust document, often in the presence of a notary public.
Special Considerations for Minor Children or Disabled Beneficiaries
If your beneficiaries include minor children or loved ones with disabilities, a living trust can be structured to provide for their care and financial needs. You may want to appoint a guardian for minor children or create a special needs trust to ensure that the inheritance doesn't disqualify the beneficiary from receiving government benefits. These provisions should be carefully considered and drafted to ensure that your loved ones are protected.
Tax Implications of a Living Trust
While a revocable living trust itself does not offer any immediate tax benefits, it may have tax implications upon your death. For example, certain estate tax exemptions or deductions may apply, depending on the value of the estate and the specific terms of the trust. Consulting with an estate planning attorney and tax advisor is important to ensure your trust is structured to minimize tax burdens for your beneficiaries.
Regular Updates to Your Living Trust
As your life circumstances change, it’s important to update your living trust. This can include changes in beneficiaries, assets, or even family dynamics (e.g., divorce, remarriage, or the birth of a child). Regularly reviewing and updating your trust ensures that it remains aligned with your current wishes and circumstances.
Frequently Asked Questions About Living Trusts
We understand that navigating the world of estate planning can be overwhelming. To help you make informed decisions, we've compiled some of the most common questions our clients ask about living trusts:
- What is the difference between a living trust and a will? A living trust allows you to manage your assets during your lifetime and provides for their distribution after your death, avoiding probate. A will only takes effect after your death and must go through probate.
- Can I modify my living trust once it’s created? Yes, one of the key advantages of a living trust is that it can be amended or revoked at any time, as long as you are mentally competent.
- Do I need to fund my living trust? Absolutely! To reap the benefits of a living trust, you must transfer assets into it. This process is called funding, and our attorneys can guide you through it.
- Will my living trust protect my assets from creditors? While a living trust can provide some protection, it does not shield assets from creditors during your lifetime. However, it can be structured to offer protection for your heirs after your passing.
- How do I choose a trustee for my living trust? It's essential to choose someone you trust and who is capable of managing your assets. This could be a family member, friend, or a professional trustee. We can help you understand the responsibilities involved.
To transfer assets to your trust, you will need to change the title of assets to the trust's name. This process can involve paperwork and legal filings, but don't worry— a trust lawyers can assist you. Contact our team today!
Protect Your Assets. Call Our Living Trust Attorneys Now!
If you need assistance when creating a living trust, our Berks County living trust lawyers can draft a document tailored to your specific needs and goals, ensuring that all legal requirements are met.
Trust lawyers can also guide you in transferring assets into the trust. We ensure that all aspects of the trust comply with legal and regulatory requirements.
Take the first step to secure your and your loved ones' future.
Ready to secure your future with a living trust? Call us at (610) 957-0018 or reach out online today. Our Berks County attorneys at Dorko Wealth & Estate Planning are here to assist you!
