What is a Living Trust?
A living trust, also known as an inter vivos trust, allows you to dictate instructions for the distribution of your assets after you pass away. While similar to a will, a trust effectively avoids the probate process. This is because a will functions more like instructions to a judge, where as a living trust keeps your affairs out of probate court. This is just one advantage of including a living trust in your estate plan; here are some others to consider.
Why Should I Include A Living Trust In My Estate Plan?
- Privacy. Unlike a will, which becomes a public record during probate, a living trust remains entirely private. This confidentiality shields your family from unnecessary scrutiny, ensuring that sensitive financial information and family matters stay within the confines of your trusted circle. This may be especially beneficial for more complex family dynamics or for safety reasons.
- Flexibility and Control. Establishing a living trust allows you to retain full control over your assets during your lifetime. You have the freedom to modify or revoke the trust at any time, as long as you are mentally competent. This level of flexibility enables you to adapt your estate plan to changing circumstances, ensuring it remains up-to-date and aligned with your wishes. Life changes happen, especially if you are one that has started their estate planning earlier in life (which, we highly recommend), so it’s important to have something that you can quickly and discreetly adjust to reflect those changes.
- Planning for Incapacity. Life is unpredictable, and planning for the possibility of incapacity is a crucial aspect of estate planning. With a living trust, you can designate a successor trustee to manage your affairs in the event you become incapacitated. This proactive step can avoid the need for a court-appointed conservatorship, granting you peace of mind and reducing the burden on your loved ones during difficult times.
- Estate Tax Planning. While estate tax laws may change, a well-structured living trust can offer opportunities to minimize potential estate taxes for high-net-worth individuals. Through strategic planning, you can maximize the wealth transferred to your beneficiaries, allowing you to leave a lasting legacy for generations to come. However, it’s important to keep in mind that isn’t to say that your trust won’t be subject to taxes, but depending on your state’s estate tax laws, there can certainly be some benefits that your estate planning attorney can help you with.
Overall, a living trust can help you plan for the future and ensure your family’s safety and security after your passing. Contact Windrose Law Center to get started on your living trust today.