When it comes to estate planning, most people know that they need to have a written legal document distributing their assets. This is the essential way to make sure that your assets are protected. Most people, especially those who are parents, want to make sure that their loved ones receive a little help when they pass away. Creating an estate plan is the best way to help your kids by distributing everything you worked so hard for to them.
Most Americans create wills and about 20% have living trusts. To find out more information about the creation of a will and the basics when it comes to estate planning, check out our previous blog post. A living trust is a legal document in which your assets are placed in a trust. This is for your lifetime and then it is transferred to a beneficiary when you pass away. This is done through someone you choose as a representative. This person is also referred to as a "successor trustee." There are benefits to both a will and a trust, but how should decide what is best for you? You have to do research or consult a lawyer to find out what best suits you.
A benefit to a living trust is it will not have to go through the process of court proceedings, which is where the assets are distributed. This basically means that your assets will be distributed faster than if you had a will. The successor trustee will be in charge of giving out your assets according to what you have instructed them to do.
Another benefit to a living trust is that it can save you money. Although a trust costs more to draft, it will save money in comparison to a will because it will save your estate money. The court costs from probating are taken out of your estate. Having a joint living trust with your spouse in another way to save you money, but is only beneficial if you have children or significant assets.
If you are a person who prefers privacy, then a Living Trust is a good option for you. A will is a public document, but a living trust is not made public.
A living trust basically gives your trustee the ability to distribute your assets quicker and without getting the court involved. A living trust is usually best for people with a larger value of estate. A will might be the best option for you, or a living trust might be the option you'd rather go with. Whatever seems to be the best fit for you is the better option. If you are not sure what option fits your scenario best, just let Palacios know, and we will help you through the process.
Source: Legal Zoom