What are The Key Benefits Of A Living Trust?

A well-crafted estate plan can ensure that your hard-earned assets end up in the hands of the right people, while also helping minimize any associated taxes. As such, an estate plan can help preserve your wealth and simplify the transfer of the assets to your loved ones after you pass away.

One of the most powerful documents you could have in an estate plan is a living trust. The reason is simple - this estate planning instrument protects your assets and gives you an unprecedented amount of control over them while you’re alive. without impacting your family’s ability to claim your assets upon your death.

So if you’re seriously considering improving your estate plan, continue reading this blog post and learn more about the main benefits of a living trust and why you should start one as soon as possible. 

What is a Living Trust?

Before diving into the benefits of a living trust, we must first understand what this legal instrument is. 

A living trust contains the assets of the creator of the trust for their own benefit while they’re alive. Upon the death of the creator, the designated successor trustee transfers the assets in the trust to the beneficiaries chosen by the trust creator.

As a creator of the trust, you’re free to change the terms at any time or cancel it entirely if you choose to do so. 

Advantages of creating a living trust

Why include this legal arrangement in your estate plan? Here are some of the biggest benefits of a living trust:

1. Helps the Family Avoid Probate

In most cases, families of a deceased individual must go through probate, which is a court-supervised legal process of distributing the assets in the estate. Due to the various specific factors, probate often ends up being a lengthy and expensive process for the family. Unfortunately, this drastically cuts down on the assets that the family inherits and delays distribution of the assets. 

By placing your assets in a living trust, you can avoid probate. Since the successor trustee will distribute the assets according to the instructions in the trust documentation, court intervention is simply not required.

This will ultimately mean a faster distribution of your assets. On average, your beneficiaries can receive the assets in a few weeks, as opposed to months or even years. Plus, if you own property in multiple states, your estate won’t be subject to probate proceedings in different states and it will pass directly to the beneficiaries.

2. Helps Preserve Estate Assets

Because probate won’t be mandatory, as we mentioned previously, your family will be able to inherit as much money as possible. 

It’s important to note that the initial costs of starting a living trust are higher than the costs necessary to create a will. Trusts are more complex, and since you’ll be funding the trust with assets, it will take slightly longer to create than a will. 

Still, considering the financial benefits of a living trust, the initial price is more than worth it. 

3. Protects Your Privacy

Since a living trust helps your family circumvent a probate process, your private affairs won’t be a part of the public record. 

To put it differently, no one will retroactively have the ability to search public records to learn about the distribution of your assets. This is a stark contrast to a will that will become a part of the public record and all the information will be freely available.

4. Protects Your Interests in Case of Incapacitation

If you become incapacitated, the person you assigned a successor trustee can manage your affairs without any court intervention. Court-appointed conservatorship can be tricky as the person will have full control over your financial affairs, so the fact that a living trust can help you sidestep this possibility is a huge advantage when compared to other estate planning instruments. 

5. Provides You Peace of Mind

One of the biggest benefits of a living trust is that it outlines a clear plan for your family on how to handle your assets. This helps bypass situations where you accidentally disinherit a close family member, protect your assets from certain people you deem unfit, and even provide the funds required for the care of a family member with special needs after you pass away. 

Taking into account all of the above, you can get peace of mind that your wishes will be respected to a t. Furthermore, a living trust will also provide an extra level of certainty to your family members in stressful times as they’ll be able to relax, knowing that you took care of sensitive matters beforehand.

Should You Create a Will?

Considering the benefits of a living trust, a will seems redundant. However, a will is still better than nothing, especially when you consider the lower costs and the simplicity. After all, anything beats dying intestate.

Living trust is simply more effective, and should be at the core of your entire estate plan. 

In conjunction with a trust, you should create a pour-over will. This helps cover any assets that you may have inadvertently left out of the trust and ensures that no property is subject to Florida intestacy laws. 

Although the pour-over will go through probate, it’s still a better option than leaving some of your assets to the mercy of the court, so to speak. 

Protect Your Assets With the Law Offices of Mary E. King

A living trust can be a powerful tool for protecting your assets, and best of all, you can start creating it immediately.

You need to take inventory of your belongings, decide who inherits what, think carefully about assigning your successor trustee, and lastly, contact the Law Offices of Mary E. King. 

As a law firm with decades of experience in estate planning, we can help you set up a plan that actively protects your interests and accounts for all of the circumstances that may befall you in the future. Plus, due to our extensive knowledge of the legal field, we can also help you avoid costly estate taxes and thus, assist you in preserving the maximum amount of wealth for your heirs. Create an effective estate plan - call 941-906-7585 or fill out our contact form.