Contrary to popular belief, estate planning for the future is not merely an antidote for the wealthy looking to escape taxes. The most basic plan that benefits every family is living trusts, however, you’ll need representation from will and estate legal services to help formulate a plan.
Trusts and wills are the primary tools of estate planning, as both allow you to decide who inherits your assets when you die, and who will administer, manage and distribute your estate when you’re gone.
The most common type of living trust, also referred to as family trust, is one that is revocable, which means that the customer has the power to amend or revoke the trust.
The power of revocation or amendment is important to the customer, because we live in a changing world where financial and family circumstances often face modifications.
Nuts and Bolts of a Revocable Living Trust
By funding a trust with your assets, you transfer the assets out of your name into the trust. Any new assets you purchase, you simply transfer those into the trust. You will become the trustee and the assets will be under your control. If you decide to move assets you do so as the sole trustee.
Upon your death, your successor trustee will take control, according to your written directions, without any involvement of the probate court.
Advantages of a Living Trust
The main advantage to create a living trust is that the family avoids the need for costly and inconvenient court administration (Probate).
· Families can save thousands of dollars in the long run.
· Living trusts act as an organized administration that provides the privilege to carry out estate planning in private.
· Living trusts are private matters; probate cases are public record and open to inspection by any person.
Flexibility
The centerpiece of living trusts is often the special considerations, managed according to your pre-specified rules. These trusts can incorporate special features to handle various family dynamics.
These special approaches may include special needs trusts for the care of children or disabled family members, trusts for pets, custom arrangements for a “blended family,” often due to a remarriage. These trusts can specify guidelines that include children from previous marriages, adopted children, stepchildren, etc.., and provisions that protect the “waste” that of a child’s inheritance from creditors, and other fraudulent individuals.
Protecting Assets
Living trusts accomplishes the essential purpose of a will. Assets transfer to your beneficiaries smoothly, without the burden of probate. By avoiding probate with a living trust, it is almost impossible to contest your pre-specified directions.
Many individuals go to great lengths to discuss their requirements after death, and yet they neglect to enforce their plans legally, often causing their family to weather the burden of probate. Estate planning for the future is simply taking control to protect your assets and detail your wishes.
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