3 Smart Reasons to Consider a Living Trust

If you want to ensure that your assets are properly protected while you are alive and that they go where you want them to go upon your death, you should consider a living trust. 

A living trust gets its name from the fact that it is created while you are still living. You can establish either a revocable trust or an irrevocable trust. As the name implies, with a revocable trust, you can dissolve it at any time if you want to. With an irrevocable trust, you can't resolve it or change it once it is in place.

Setting up a living trust can be a smart estate-planning decision for many individuals. It is essential to understand the exact benefits of engaging in this type of estate planning.

Smart Reason #1: Minor Children

If you have minor children, you should set up a living trust. With a living trust, any money or assets that you leave your minor children can be held by the trust and distributed at different points in your children's lives, when they can handle the responsibility of what to do with that type of money. That way, your children are not given access to huge sums of money as a minor, but rather the trust distributes the money to them when they are older and ready to handle that level of money.

Smart Reason #2: Reduce Estate Taxes

You may have paid taxes on all the assets that you accumulated throughout your life. However, the sad truth is that once you die and you want to pass on those assets, the people who get them are once again going to be stuck paying taxes on them. With a living trust, if you work with an estate planning attorney and you draft it correctly, you can greatly reduce any estate taxes that your heirs will be saddled with when you die. You may not be able to eliminate estate taxes completely, but you should be able to reduce the burden they put on your heirs and the chunk of your assets that will have to be given up to pay taxes.

Smart Reason #3: Keep Out of Probate

When you don't leave a will or a trust, your assets can end up in probate. Probate is a legal process that will expose your assets to public knowledge and can be costly and time-consuming for your heirs to deal with. It adds another legal layer to your death that your family will have to deal with.

With a living will, your assets will be in a trust, which means they will not have to go to probate. Your heirs will not have to waste their time and money dealing with probate; your assets will just be divided according to the terms of your trust, without the need for additional legal oversight.

A living trust allows you to have control over your assets now and when you die. It can help keep your assets out of probate when you die and reduce any potential estate taxes. It is also a great way to protect assets for minor children and ensure that they gain access to your assets when they can handle them. Learn more by contacting companies like The Trust Pros.