If you are considering a living trust, you should know how it functions.
Whether you are a prince or a pauper, you need an estate plan.
Against this backdrop, a recent Fox News article asks “Why Should I Put My Home in a Living Trust?”
What is a living trust?
This trust will hold the title to assets on your behalf while you are still living (i.e., “living” trust).
While alive, you will likely be the trustee.
If you become incapacitated, the trust will oversee the assets in your stead via the successor trustee you appointed when you created (or subsequently "amended") the trust.
If you die, the assets will be administered by your successor trust for your beneficiaries per your instructions.
Although living trusts and wills both allow you to distribute your assets after death, there are some distinct difference ... especially how those assets transition postmortem.
Unlike in a will, property in a living trust can be set up to pass to beneficiaries without being included in a probate proceeding.
By using a living trust, your assets will be distributed efficiently and privately.
It is often a good idea to fund your trust using real estate, especially if you own homes in different states.
If you have been advised to utilize a trust in your estate plan, you have another question to answer.
Should you get a revocable or irrevocable living trust?
What are the differences?
With a revocable trust you can make changes regarding what property is included and can change or even dissolve the trust.
Chances are you will use this when you want to retain the greatest control over your assets until you become incapacitated or die.
On the other hand, an irrevocable living trust is set in stone.
You cannot remove assets or dissolve the trust.
Why would someone possibly choose this?
Irrevocable trusts can have significant advantages when it comes to asset protection, tax savings and long-term financial benefits.
Obviously trusts are quiet complex.
To set one up or determine if one is necessary for your situation, work with an experienced estate planning attorney.
A DIY trust will not cut it.
Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.
For more information about estate planning in Overland Park, KS (and throughout the rest of Kansas and Missouri), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.
Reference: Fox News (October 5, 2016) “Why Should I Put My Home in a Living Trust?”