Few people want to think about what life will be like once they are gone, but sometimes it can be beneficial to do just that. For example, have you ever thought about what will happen to your assets after you pass away? One way to have control over what occurs is to create a living trust. Sometimes misunderstood to be a will, a trust offers people a different kind of option for handling assets.
What It Is
In a nutshell, a trust is a legal document that designates a trustee to oversee the transfer of assets after someone passes away. While this might sound like a will, a key difference between a will and a trust is that the latter goes into effect while the grantor is still alive. In addition, having this kind of documentation in place allows individuals to avoid the probate court. With a will, on the other hand, you must go through a sometimes complicated and expensive legal process.
How It Works
Prior to the death of the grantor, the trustee assumes fiduciary responsibility of transferring assets. After the grantor passes away, the trustee then carries out the process of asset distribution according to instructions in the trust. This can make an after-death asset transfer much simpler than with a will because no one has to go to court. A key reason for this is because the process of working with the trust begins while you are still alive.
Types of Trusts
With trusts, you have two options. You may have one that is irrevocable or revocable. With the revocable option, you have the ability to make any changes to your trust that you see fit. A major benefit of this is the fact that you can add or remove beneficiaries and modify conditions for asset management at any time. If this sounds like a great option, consider one downside: You cannot protect revocable trusts from creditors.
If you really want to protect your assets, an irrevocable trust is another option, as a top trust lawyer, like one from Klenk Law, can explain. With this route, no one can make changes to the document except under very rare circumstances. While the inflexibility can be a disadvantage, people usually choose these kinds of trusts because of the tax benefits. For example, having this kind of document will remove any transferred assets from the benefactor’s taxable estate.
Without a doubt, having a trust in place can make asset management easier after you are gone. In addition, it can give you more control over things while you are still here. Contact an experienced trust attorney today to help you figure out a plan for your assets in the future.