Do you want to make sure your loved ones are taken care of when you’re no longer around? If so, you might want to consider setting up a living trust.
It’s not a fun subject, but it’s important to decide now how you want to handle your estate. Keep reading to learn more about the benefits of a living trust.
What Is A Living Trust?
A living trust is a legal document that clearly outlines what you want to do with your assets after you die. It’s similar to a will, but it comes with a number of benefits that make it more appealing.
Top 5 Benefits of a Living Trust
The biggest difference between a living trust and a will is that a will only becomes effective after it’s been entered into probate after you die. Probate is the court-supervised process of distributing the deceased person’s estate.
Probate is often time-consuming and expensive, but a living trust allows you to avoid this process. Instead, a successor trustee — whom you appoint — distributes assets without court intervention.
There are a lot of fees associated with probate, including attorneys’ fees, court fees, and executor fees.
In some states, attorneys and courts can take up to 5 percent of an estate. Depending on the size of the entire estate, that could easily add up to tens or even hundreds of thousands of dollars.
Protect Your Privacy
A living trust is a private document. It does not become part of public record, as a will does during the probate process.
Because a living trust is private, no one can search public records to learn more about the distribution of your state.
Avoid Court Intervention
When you choose a successor trustee to manage your estate, he or she can step in without court intervention if you become ill or incapacitated. This way, you avoid court-appointed conservatorship of your affairs.
Gain Peace of Mind
A living trust sets up a clear plan for distributing your assets. This way, you have peace of mind knowing that all your loved ones will be cared for in the future.
A living trust also gives your beneficiaries peace of mind because they’ll know you’ve already handled your estate.
How To Settle A Living Trust
There are lots of benefits of a living trust, but, if you’ve been named a successor trustee, settling one is a lengthy process. It helps to make a living trust checklist so that you don’t miss anything.
The following should all be included on this checklist:
- Prepare an inventory of the estate, including assets and liabilities
- Order five to ten original death certificates from the funeral home
- Keep records of your expenses
- Send out a statutory notice to beneficiaries
- File an estate tax return
- Distribute personal property
- Make preliminary and final distribution to beneficiaries
- Have beneficiaries sign a receipt and waiver of further accounting
What Do You Think?
Have you ever set up or settled a living trust? Let us know in the comments below.