Although most people believe that estate planning involves only creating a last will and testament, a will is not always the best option and it is certainly not the only one. If you use a will to state your final wishes, your heirs will receive lump-sum inheritances. However, everyone is not good at managing money, and this can be disconcerting. Let our Huntersville living trust attorney explain how using a living trust can be a better choice than a simple will.
One way to deal with this is to create a revocable living trust and use the trust as the centerpiece of your estate plan instead of a will. In doing so, you do not lose control of the assets while you are living.
A living trust is not the same as a will
You may be under the impression that a living trust is a document that accomplishes the same thing as the last will. This is true in a very general sense, but there are some major advantages if you use a living trust instead of a last will. If you use a last will to distribute property at the time of your passing, you would be allowing for the distribution of lump-sum inheritances. This could be perfectly acceptable for some people who are established, but you may have people on your inheritance list who are not good at handling money.
Use your trust declaration to explain your wishes
Things are different if you use a revocable living trust instead of a last will. As the grantor of the trust, you would act as the trustee while you are living, but you would name a successor to administer the trust after you pass away. Our Huntersville living trust attorney can help you properly draft your trust declaration.
In the trust declaration, you could leave instructions that the successor trustee would be compelled to follow regarding the way that you want assets to be distributed to the beneficiaries. To protect a spendthrift, you could instruct the trustee to distribute limited assets on a monthly basis over an extended period of time.
Spendthrift provisions can be useful
A spendthrift family member could burn through his or her inheritance quickly. Down the road, there would be nothing to draw from, and you would not be around to provide financial assistance. The ability to provide spendthrift protections is one advantage that you gain with a living trust over a last will, but you can also take steps to prepare for possible incapacity. Unfortunately, many seniors become unable to handle their own financial affairs at some point in time. Let our Huntersville living trust attorney help.
Using a living trust to prepare for incapacity
There are various causes of incapacity, but Alzheimer’s disease is extremely widespread among those over 85. Around 45 percent of people who are at least 85 have contracted the disease. When you create the trust declaration, you could empower a disability trustee to handle the trust administration tasks in the event of your incapacitation.
Living trusts can provide flexibility
You have a great deal of flexibility when you have a living trust so you don’t have to worry about losing control once you convey assets into the trust. It is possible to add property to the trust along the way, and you can change the terms of the trust at any time. A living trust can be a good choice for a wide range of people.
Naming a successor trustee
You name a successor trustee to take over the trust administration duties after you are gone, and you name a successor beneficiary. It is possible to name an individual that you know personally to act as the trustee, but many people will use a professional fiduciary such as a trust company.
Living trusts used to avoid probate
The probate process is time-consuming, it can be costly, and it is public. Anyone who is interested can find out how you planned your estate. To avoid these pitfalls, you could use a revocable living trust. When this type of trust has been established, the trustee can distribute assets to the beneficiaries outside of probate.
Join us for a FREE seminar today! If you have questions regarding living trusts or any other estate planning matters, please contact the experienced attorneys at The Potter Law Firm for a consultation. You can contact us either online or by calling us at (704) 944-3245 (Huntersville, NC or Charlotte, NC) or for individuals in Kentucky, at (606) 324-5516 (Ashland, KY) or (859) 372-6655 (Florence, KY). We are here to help!
John’s practice focuses on the use of Wills and Living Trusts in Estate Planning to help individuals protect their families and preserve their legacies after their deaths, but his practice also focuses on the critical issues of protecting individuals with dementia or other diminished capacity, assisting individuals in qualifying for Medicaid and other government benefits to offset the costs of long-term care, and providing special needs planning.
John is admitted to practice law in North Carolina, South Carolina, Kentucky, and Ohio, and he is accredited by the Department of Veterans Affairs.
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