One of the most commonly held misconceptions within the realm of estate planning is the idea that you lose all control of assets that you convey into a living trust. For this reason, many people don’t even consider the possibility. They are not prepared to make a decision that is etched in stone.
This sentiment is understandable, but in reality, the most widely utilized trust in the field of estate planning is the revocable living trust. With a revocable trust, you can act as the trustee and the beneficiary while you are alive. There is no loss of control while you are alive, and you can amend or revoke the trust for any reason.
Living Trust Amendments and Restatements
When you initially establish a living trust, you would sign assets over to it and name a successor trustee to act as the trust administrator after you are gone. You would add successor beneficiaries as well, and you would include asset distribution instructions for the trustee to follow after your passing.
After you have the trust in place, you would not be forced to stick with the original terms. You could make minor changes through the addition of Living Trust Amendments. For more major alterations, like significant beneficiary additions or subtractions, you could execute a Living Trust Restatement.
Why Use a Living Trust?
If you are wondering why you would want to use a living trust instead of a last will, the most advantageous benefit for many is the streamlining of the estate administration process.
All of the property in your estate would be easy for the successor trustee to identify after your passing. This may not be the case when you maintain direct personal ownership of many different assets.
To account for resources that may have never been conveyed into the trust, you could add an additional estate planning document called a pour over will. This would allow the assets to “pour over” into the trust after your death.
Another benefit is the ability to account for possible latter life incapacity. Unfortunately, a significant percentage of elders become unable to handle their own affairs at some point in time.
You could account for this if you name a disability trustee in the trust declaration. It can be the same individual or entity that will act as the successor trustee in a broad sense, but this is not required.
Many people are also relieved when they hear that they can use a living trust to protect a spendthrift beneficiary.
You could include a spendthrift clause that would prevent the beneficiary’s creditors from accessing the principal through litigation. Plus, the beneficiary would not be able to touch the principal directly. You could instruct the trustee to provide limited distributions over an extended period of time.
Learn More About Living Trusts
We have provided a few very basic facts about living trusts in this blog post. You can learn a great deal more if you take the time to read our special report on the subject. It is free, and you can click the following link to gain access right now: Free Living Trust Report.
Schedule a Consultation!
Our doors are open if you would like to discuss your estate planning goals with an attorney from our firm during a confidential consultation.
You can send us a message through our contact page to set the wheels in motion, and we can be reached by phone in North Carolina at 704-944-3245 (Charlotte, NC or Huntersville, NC). If you would like to visit us in the great state of Kentucky, the number is 606-324-5516 for Ashland, KY, and 859-372-6655 for Florence, KY.
- Estate Planning: Emotions Often Lead to Inaction - May 29, 2020
- Choose the Right Inheritance Planning Tools - May 27, 2020
- When Do You Qualify for Social Security? - May 18, 2020
