While considering estate planning strategies, you may be wondering, “what does a living trust do for you?” It really depends on what your estate planning goals are. Revocable living trusts are a great option for many people but they may not satisfy the needs of every client. Your living trust attorneys can help you determine how you can get the most out of your trust during your lifetime.
What are Some of the Benefits of a Living Trust?
Since a revocable living trust can be amended or revoked, you have the ability to dissolve the trust at any time, and you can walk away in direct possession of the property once again. For this reason, you are retaining incidents of ownership. As a result, it will not accomplish objectives that require you to give up ownership. Estate tax savings would be one of these objectives.
Individuals with a high net worth should know about the taxes that can apply to asset transfers. Your wealth can be significantly eroded as it is being passed along to your loved ones after your death. Though a revocable living trust will not provide you with advanced estate tax protection because you are retaining incidents of ownership, there are other trusts that can. If you still have questions, let our living trust attorneys explain.
Using Living Trusts 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. If avoiding probate is a goal, 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.
Trusts can be useful for various reasons
Avoiding probate is not the only reason you should consider using a trust. If you use a will to state your final wishes, your heirs will receive lump-sum inheritances. However, not everyone is good at managing money, and this can be disconcerting. Let our living trust attorneys explain how using a living trust can be a better choice than a simple will.
A Living Trust and a Will Do Not Work the Same Way
You may believe, like many others, that a living trust is basically a document that does the same thing as the last will and testament. This is true in a very general sense. Yet, there are some major advantages if you use a living trust as opposed to a last will and testament. If you use a simple will to distribute property that was in your personal possession at the time of your passing, you are 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 prepared to handle money.
Using a living trust to prepare for incapacity
There are various causes of incapacity, but Alzheimer’s disease is 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.
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 of a living trust over a last will and testament, 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 living trust attorneys help.
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. You can 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.
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 or Huntersville, NC) or for individuals in Kentucky at (606) 324-5516 (Ashland, KY) or at (859) 372-6655 (Florence, KY).
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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