One of the most perplexing estate planning tools is a living trust. The truth about having a living trust has been convoluted by myths that have developed due to misinformation. The benefits of a living trust far outweigh the risks. It is very beneficial to the estate owner to explore different options, including the option of having a living trust. Let’s explore the concept of a living trust together, and clear up any misconceptions.
Let’s get back to basics, and learn about the definition of a living trust. A living trust allows the author (or estate owner) to remain in control over the trust and its property until life ceases. A living trust is also known as a revocable living trust. The document outlining the terms of the living trust is much like a last will and testament. The difference allows the avoidance of a traditional probate process. This ensures an efficient distribution of assets to the beneficiaries. The trust owner designates a successor trustee who serves, once death has occurred. The successor trustee must abide by the grantor’s wishes to lawfully carry out their final plans.
There are multiple benefits to pursuing a living trust instead of a traditional will. The primary benefit is that it allows an easy transitional process for the beneficiaries after the death of their loved one. Another benefit is the shroud of confidentiality a living trust can provide. All matters will remain private after death. A last will and testament is a public record after death. Most living trusts can be written in a way that they can be edited at any point prior to death by the trust owner. This allows the trust owner to remain in control, which is a very important factor to many people.
Not just for the rich
One of the most common myths about a living trust is that it is only for the exceptionally wealthy. This is simply not true. Many individuals who have lived non-assuming lifestyles opt for the flexibility of a living trust to protect their loved ones, and make the devastation of death a little easier.
Benefit all involved
There is also a common belief that a living trust only benefits the beneficiaries. In reality, it is advantageous for the grantor to opt for a living trust, as it provides greater flexibility for their care if they become incapacitated while still living.
Accessibility
Let’s debunk a third myth…Can a trust owner access funds if they are in a trust? Yes, that is why it is called a living trust. The accessibility of the assets in a living trust is always determined by the trust owner. Flexibility is key with a living trust.
There is a belief that living trusts can avoid probate entirely. This is generally true, and the best way to ensure this is to work with an estate planning professional. They can navigate you through the development process if you want to avoid probate.
Lastly, a living trust is not difficult or expensive to create. An estate planning professional will guide you through the process and ensure that all your needs are met.
