Although most people equate estate planning with simply creating a last will and testament, a will is not always the best choice. 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 Charlotte 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, so you do not have to be concerned on that level. A living trust is one option, but there are many different tools in the estate planning toolkit.
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 a last will. This is true in a very general sense, but there are some major advantages that you gain if you use a living trust instead of a last will. If you use a standard last will to distribute property that was in your personal possession 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 utilize a revocable living trust instead of an ordinary 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 Charlotte 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 Charlotte living trust attorney help.
Using a living trust to prepare for incapacity
There are various different causes of incapacity, but Alzheimer’s disease is extremely widespread among the oldest old. 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 utilize a revocable living trust. When this type of trust has been established, the trustee can distribute assets to the beneficiaries outside of probate. You could also account for possible incapacity when you have a revocable living trust. A disability trustee could be empowered to administer the trust in the event of your incapacitation.
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 (Charlotte, NC), (606) 324-5516 (Ashland, KY), or (859-372-6655 (Florence, KY). We are here to help!