A “Living Trust” is a trust you created that is active while you are alive versus a Testamentary Trust which becomes active at your death. When you create a Living Trust, you ensure that your assets will be disbursed efficiently to the people you choose after your death.
The big advantage to a Living Trust is that the trust doesn’t have to go through probate court like a will does. Probate can be expensive in attorney and court costs while also causing long and frustrating delays. A Living trust is an arrangement under which one person, called a trustee, holds legal title to property for another person, called a beneficiary. You can even act as your own Trustee if you’d like.
When you create a trust, the titling of assets is changed into the trust’s name, as if it was a living entity. Specific details of your wishes upon death can be provided for in the trust. But not everyone needs a trust. Transfer of assets at death may be handled through a beneficiary designation on some holdings and investments. If you’re using beneficiary designations, make sure all your paperwork is up to date. For instance, if you get divorced, be sure to remove your ex-spouse as a beneficiary.
For more information about how to plan well for your family’s future, give us a call today.