Insights Into How Our Legal System Works

Why You Need A Living Trust

12 January 2015 by Yolanda Lane

Estate planning can be a daunting task; with so many decisions you are forced to make, it can become an overwhelming process for you. However, a living trust might be the answer to many of your worries (including taxes and probate). While it sounds complicated, the task should be undertaken by your attorney. There are many benefits to having a living trust, and it is something you should consider when working with your lawyer.

What is a living trust?

A living trust is a trust where you are the trustee until you pass away. At that time, the trust will pass on to the beneficiary of your choice. Simply put, you have complete control of the trust until your passing. Additionally, with a living trust, you can put all of your assets into the trust.

Why is it important to have a living trust?

A living trust:

• is one way to avoid probate
• can cut back on estate taxes
• help keep your estate and family information private
• will distribute assets much more quickly than if your estate were to go to probate

With a living trust, you can have a greater sense of security over your estate and you will remain in control until it passes to the beneficiary. A living trust is especially important for people who have complex financial situations and large estates, and is especially important to business owners.

Are there any drawbacks to having a living trust?

Yes, there are some negatives when it comes to creating a living trust. For one, it may cost more for the attorney to create the trust, as it is much more time consuming and there is more paperwork involved. Secondly, in some states, creating a living trust might prompt a tax that must be paid by the trust. Additionally, you will still need a last will and testament, even if you have a living trust. Another small, yet noteworthy downfall, is the fact that you may need to update the beneficiaries on your bank accounts and other documents. 

A living trust is something you should strongly consider if you want your estate to avoid probate and estate taxes. If you have a large estate or a business (or, several), the living trust can be especially beneficial to you. To learn even more about the living trust and what it can do for you, please contact your estate planning lawyer, like those at Linn Schisel & DeMarco Attorneys At Law, and work closely with them during the estate planning process. 

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