Living Trusts are one of the most common estate planning tools in use today. This legal arrangement, usually drafted by an estate attorney, creates a separate entity called a Living Trust. A Living Trust is called that simply because it is created while you’re alive (as opposed to a “testamentary” trust created after death).
Basically an after-death trust (Testamentary Trust) will spring into existence, usually by virtue of a will, after a person’s death. The assets to fund this type of trust must usually go through the probate process. In some cases this type of trust may need to be court-supervised even after the estate is closed.
A living trust, on the other hand, is a trust made while the person establishing the trust is still alive.
- A living trust also is useful for individuals subject to estate taxes.
- Living Trusts avoid probate, since they are completely private. Because a trust is recognized as a separate legal entity, distributions can be made by a Trustee without any involvement from the courts. The courts maintain no control over the Trust’s assets, and do not tie up the assets in a lengthy (and costly) probate process. The Trustee simply distributes assets to named heirs, but only if those assets have actually been placed inside the Trust.
- No worry about losing control of assets. Carefully constructed Living Trusts protect your assets.
Every family’s situation is different. Feel free to contact me if you need further guidance.