What is a Living Trust?
Categories: Trusts
What is a Living Trust?
A living trust is a legal document that transfers one person’s assets to another while retaining ownership. The name “living trust” gives the impression that it is a trust which still lives on. If you’re going to pass anything down from your family to the next generation, you should probably consider having confidence.
This is especially true if any family members might not be able to handle receiving all of the money or assets. Passing things down from one generation to the next can be challenging enough without dealing with all of the red tape and legal hassles that come with it. That is why more and more people are starting to look into living trusts instead. These trust accounts are essentially just bank account substitutes for your family members and offer other benefits over traditional trust accounts. This article will explore everything you need to know about starting a living trust and why you should have one.
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Benefits of a Living Trust
There are many benefits to having a living trust. The main advantage is that it can be used as part of an estate plan. This means that you will have a legal document that will ensure the distribution of your assets is done by your wishes and that the assets will be distributed to those you want to receive them. This will help ensure that the next generation can receive the assets passed down to them. An estate planning attorney can help you create a living trust that will meet your needs and clarify your wishes.
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Living Trusts are Not Unlimited
While it is true that a living trust can be used to make all of your assets “inheritable,” this is not a legal term. A living trust is only considered an “inheritable” trust if it has been established through a will. This means that you must have an excellent and validating choice before establishing a living trust. If you do not have a will, then your entire estate (assets and debts) will be distributed according to the state law of your state. This can cause several issues, including that you will not be able to leave a portion of assets to anyone in your family.
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Probate Attorney
Several people will try to sell you on the idea that you do not need to hire an attorney for your living trust. The reality is that a living trust requires more legal work than any other estate planning document. This is because it must be filed with the probate court in your state, and this needs an attorney’s help. If you are not willing to hire an attorney for this, you should probably consider another option. For an estate planning attorney near me, you can find a great probate attorney in your area.
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Estate Planning Lawyer
While it is true that you can create a living trust without legal help, the reality is that you will not be able to use this document effectively. A living trust must be filed with the probate court in your state and requires an attorney’s help. If you do not have the money or are unwilling to hire an estate planning attorney, consider having a lawyer assist you with this process. Estates lawyers near me can help you draft a living trust that will meet your needs and clarify your wishes.
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A Living Trust Protects Your Privacy
While it is true that you will not be able to make your assets “inheritable” if you do not own a will, there are many benefits to having a living trust. This includes the fact that it protects your privacy. As mentioned above, if you do not have a will, your entire estate (assets and debts) will be distributed according to the state law of your state. This can cause several issues, including that you will not be able to leave a portion of assets to anyone in your family.
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Deciding Which Is Better: A Trust or a Will
There are several benefits to having trust versus a will. The first benefit is that a trust does not require you to pay any estate administration fees for it to be valid. This means that if you do not own property and have no debts, you will not have to pay any fees or taxes on your assets. This can save you quite a bit of money over the years. In addition, if the person who inherits your assets dies before you do, then the remaining assets will still be protected because they are held in trust by the trustee until they pass to someone else.
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Ready to Make a Living Trust?
If you are ready to make a living trust, then the first thing that you should do is to contact an estate planning attorney near you. This will help ensure that you make a sound decision and that your wishes are being carried out correctly. The next step is to visit the state’s probate court website and find the information needed to start the process of creating your trust. After this is done, it is time to choose which type of trust you would like to make. There are three different types of trust: revocable living trusts, irrevocable trusts, and testamentary trusts. Each type has its advantages and disadvantages, so you need to understand them before making any decisions. An estate planner will be able to help you decide which type of trust is best for you.
While there are many benefits to owning a living trust, it is essential to note that you will need the help of a lawyer for it to be valid. This is because some legal rules need to be followed for the trust to be good. In addition, if you do not own any property and have no debts, you will not have to pay any estate administration fees or taxes on your assets. This can save you quite a bit of money over the years. When looking at which one is better, living trust or a will, it is essential to note that both documents are similar in nature and purpose. Both documents protect your assets from creditors and state laws to distribute them according to your wishes when you die.