Living Trusts - What You Need to Know for Effective Estate Planning

Unlearn why setting up a living trust may be the ideal way for your estate planning needs.

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Living trusts are legal arrangements in which assets are transferred from your name into the care of a trustee for management on behalf of beneficiaries. You have two choices when setting up a living trust; either it can be revocable or irrevocable based on your preferences; with the latter type, the transferred property still belongs to you and any changes can be revoked while alive; while an irrevocable trust cannot take back what has been transferred back.

Probate, or the court-supervised process of distributing assets after death, can be both time consuming and expensive - often costing as much as 10% of its total value. By placing assets into a living trust instead, they bypass this lengthy and expensive process altogether, and can instead be distributed immediately to beneficiaries without worrying about public records being available online.

One key benefit of creating a living trust is being able to select your own trustee who will manage the trust assets according to your wishes, offering more flexibility than a power of attorney and particularly useful if you become incapacitated. You can even include a "pour-over" will in your living trust in order to catch any assets not included within it or in your will and ensure they go directly to their beneficiaries without probate proceedings being required.

Please note that I am not a lawyer, and the information provided is not legal advice. If you need legal advice, please consult a qualified attorney. For your convenience, we have a Recommended Professionals page featuring trusted attorneys who can assist you with your legal needs.