the Benefits of Creating a Living Trust
Living trusts are very important estate planning documents that dictate your intentions regarding a specific set of assets after you die or become incapacitated. Often, people will incorporate a living trust in their estate planning documents, so it is important to understand what the difference is between a living trust and a will.
Probably the biggest difference between a will and a living trust — and the reason why living trusts are so popular — is that wills must go through probate proceedings before the decedent’s assets are distributed to heirs. In the case of a living trust, probate proceedings are avoided, which allows the transfer of assets to heirs to happen quickly, easily and more cost-efficiently.
Like an executor does when there is a will, the named trustee of a living trust carries out the instructions detailed in the trust document after the trust grantor has died. The selection of the trustee in a living trust must therefore be done carefully. Trust creators should remember to select someone who has the necessary life skills, experience, time and mental and physical capacity to appropriately carry out his or her duties and serve as trustee.
Most individuals will choose between two kinds of living trusts: revocable living trusts and irrevocable living trusts. A revocable living trust transfers your assets to the trust’s ownership. The trust can be revoked or changed at any time after its creation. However, it will not help estate planners minimize or eliminate estate taxes.
In the case of an irrevocable living trust, the estate planner is not permitted to make any changes to the trust document after it has been created. You surrender your assets to the trust’s ownership and will not be able to change or cancel the trust at any future time. However, your heirs will benefit from not needing to pay estate taxes on the contents of your irrevocable trust.
It may not be immediately clear whether a living trust is right for you, but by speaking with a Florida estate planning attorney, residents can get a sense for whether his strategy will promote their needs and goals.
Source: Dummies.com, “What is a living trust?,” accessed Oct. 16, 2015
