Wondering what a living trust is?
Come and learn how living trusts can benefit you and your loved ones.
We Know: All About Living Trusts
What is a living trust?
Living trusts are created with the intention of allowing individuals to control their assets during their lifetime or control of distribution upon death. Essentially, you control your assets while you're alive. The person you name as trustee oversees the distribution of your assets when you die. You can change or revoke a living trust at any time during your lifetime.
Who is involved in a living trust?
Other than an attorney, a living trust involves three people:
Usually, grantor and trustee are the same person, while alive.
What is the difference between a living trust and a will?
Wills and living trusts are estate planning tactics. The difference between the two is that living trusts take effect while you're alive and wills take effect when you die.
Who needs a living trust?
A living trust is for those who want to reduce estate taxes and avoid the hassles of going through probate. Any assets owned by the deceased go through probate. A trust is a private account. Assets placed in the trust are owned by the trust and do not have to go through probate. The assets pass directly to the heirs upon death.
Those with complex living situations, such as remarried parents with children on either side, may benefit from a living trust. A living trust, however, does not shield one's assets from potential creditors or debtors.
What goes into a living trust?
Anything of value can fund a living trust. This includes savings, stocks, bonds, real estate, insurance, or personal property. Grantors must actively transfer assets to the trust (funding the trust), or the trust becomes invalid.
What are the advantages and disadvantages of using a living trust?
A living trust avoids probate, gives you control over your assets, and is fast. Living trusts are private documents and not part of the public records. Wills, on the other hand, are subject to public records. The drawbacks to using a living trust are the potential costs when not properly executed, taxes, and time.
Do I need to worry about any scams?
The living trust is a hot button topic and subject to numerous scams that prey on unfounded fears. The elderly are particularly susceptible to these scams. Salespeople charge high rates for living trust services. The packages that these people sell may not suit the estate planning needs of all parties. Often times, many of these packages fail to deliver what is promised. Before you commit to any package, do your research and checkout the potential dealers using the services of your local Better Business Bureau.