Living trusts are an estate planning vehicle for distributing assets to beneficiaries. While not everyone needs to create such arrangements, many families can benefit from doing so. If you’re unsure whether you should include trusts in your estate plan, learn more about your options and how you can work with an attorney to plan for the future with this guide.
A Guide to Living Trusts
What are they?
Living trusts are legal entities that holds assets securely until they’re transferred to the next owner. Unlike wills, which are also a vehicle for bequeathing property, trusts go into effect as soon as they’re funded, hence the modifier “living.” This offers a major advantage because it means the property they contain doesn’t have to pass through probate upon the creator’s death.
What does the trustee do?
The trustee is responsible for managing the trust and distributing the property it contains according to the terms of the arrangement. As long as the creator of the trust is of sound mind, he or she can serve as the trustee.
If the assets won’t be distributed until after you pass, however, you’ll have to choose someone else to serve in the role or name a successor before you become incapacitated. People often choose responsible loved ones or their attorneys to be their trustees. There are also financial institutions that offer trustee services.
Can you amend a living trust?
The creator, or grantor, of the trust may modify or revoke it at any time, as long as he or she is of sound mind. Even if you named a third party to serve as trustee, you can step in and amend the terms of the arrangement as needed.
As such, there is virtually no reason to postpone estate planning. You can modify both your last will and living trusts as your circumstances change.
What are the advantages?
Because probate proceedings are essentially public record, leaving assets to loved ones in your will jeopardizes their privacy. Trusts, on the other hand, allow for total anonymity. What’s more, once you transfer an asset to a trust, it’s no longer considered part of your personal property. As such, this strategy could reduce your annual tax burden significantly.
For help with your estate plan, turn to The Law Office of J. Baron Groshon. With offices across North Carolina, this practice is backed by more than 28 years of experience in the legal field. In addition to wills and trusts, attorney Groshon is well-versed in bankruptcy petitions and guardianships, and he will do everything in his power to protect your best interests. Find offices in Charlotte, Concord, Gastonia, and Lake Norman online. To request a consultation, call (704) 342-2876.