Why a Trust Is a Great Estate-Planning Tool — Even if you’re Not Rich

Why a Trust Is a Great Estate-Planning Tool — Even if you’re Not Rich

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A living trust is a document created during the lifetime of a property owner but covers for when he is alive and well, incapacitated, and lastly, dead. The document protects your assets, prevents unnecessary probate processes, and allows you a good say on how you want your estate to be shared. Typically, once the document is created, it goes into implementation, so far you have your assets placed into the trust.

A living trust provides an agreement between a trust maker, a trustee, and a named beneficiary. With a trust document, you, as the trust maker or grantor, can transfer assets to your desired beneficiary through a trustee. Typically, the trustee would keep and manage the property until it was finally transferred to the named beneficiary. More so, a trust can actually replace Will’s function at the trust maker’s death. It is important to know that all living trusts are either revocable or irrevocable trust. The major difference between these kinds of trusts is who manages the assets or can be named as trustee and whether the terms in the document can be changed or unchanged.

Revocable trust

A revocable trust is a document that allows the trust maker to change the terms of the trust easily. This trust ensures your sole benefits as you can name yourself as the trustee or even together with beneficiaries. Aside from this, you can make changes to the terms of the document. The revocable trust helps during hard times of incapacity. It allows you to name a successor trustee to handle your financial affairs. As such, you still hold the continued power over your assets. The underlying importance of these is that a court-supervised guardianship will not be needed.

Irrevocable trust.

The irrevocable trust is quite the opposite of the revocable trust. While you can undo the terms of the document in the latter, an irrevocable trust document cannot be changed. The purpose of this trust is to transfer an asset from your name to another individual. An irrevocable can help you avoid excessive estate taxes, probate, and further protection from creditors. In addition, you get to obtain Medicaid eligibility as you would have transferred your assets to another person. It is important to note that you can’t serve as a trustee in this document, and you can undo or dissolve the trust.

Who should be your trustee?

Typically, there are no general rules on deciding who should manage or oversee your trust documents. The terms of the document and the type of living trust you should create, however, can decide who should be the trustee. In an irrevocable trust, you can’t be named the trustee as it defeats the purpose of forming the document to prevent creditors and another financial lawsuit.

For married couples who choose to create a revocable document, either of the spouses can be named as a trustee to the document. There are a few options to pick from for a trustee. You can decide to go with a family member as a trustee, a corporate trustee, or even a professional trustee. Usually, an estate planner who is professional in creating estate documents can easily step into this role.

Whomever you decide to choose, you need to understand that they must be competent and reliable, know how to legally transfer assets to beneficiaries, and be able to handle complex financial or investment situations. A professional trustee is likely to fulfill these roles properly. Contact an estate planning attorney.

Bottom line

Due to the nature of an estate plan and how complicated it can be, you may need the help of an estate planning attorney when planning your estate. An estate planning attorney is an expert in the estate planning process. You benefit greatly if you contact one when planning your estate. They are experienced, familiar with loopholes in the estate planning process, know the court processes well, have important resources at their disposal, and can offer you the best advice when you need it.

Contact our Estate planning lawyer.

Estate planning mistakes exist. Sometimes, these mistakes alter the intent of the estate owner regarding his or her estate. The main purpose of an estate plan is to mirror the wishes or intentions of the estate owner; an estate plan that doesn’t do this has failed. To avoid unnecessary mistakes, it is best that you contact a professional. Contact us, and we will provide you with the best estate planning lawyer near you for your estate plan.

DISCLAIMER: The information provided in this blog is for informational purposes only and should not be considered legal advice. The content of this blog may not reflect the most current legal developments. No attorney-client relationship is formed by reading this blog or contacting Morgan Legal Group.

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