Once you start acquiring assets, like property, make arrangements for them in case something happens to you. In addition to drafting a will, an estate planning attorney may advise you to create a living trust. This document offers a host of benefits when it comes to distributing assets. Here’s what to know about these legal arrangements so you can devise a comprehensive estate plan.

FAQ About Living Trusts

What are they?

A living trust is a financial entity that holds assets on the creator’s behalf until they’re distributed to the rightful beneficiaries. Since trusts are funded upon their creation, the property they contain doesn’t have to pass through probate for beneficiaries to assume ownership.

How does a trust differ from a will?

A will is the foundation of every estate plan and serves many purposes, from establishing guardianship to naming an executor. On the other hand, a trust is solely used for holding property, and it offers more flexibility when it comes to distributing assets.

You can dictate how the beneficiaries may use their inheritances and when they’ll receive them—wills don’t grant this level of control. Additionally, the terms of a will become public record, whereas trusts protect your loved ones’ privacy since their assets bypass probate.

Who manages the trust until the beneficiaries receive their inheritances?

Every trust has a trustee. This party is responsible for managing the funds, covering tax obligations, and distributing the property according to the terms of the arrangement. You may serve as your own trustee as long as you’re of sound mind.

However, if some of the property won’t be distributed until after you pass, you’ll have to name a successor trustee. This person may be a close friend, loved one, financial advisor, or estate planning attorney.

Can I nullify a living trust?

If you create a living trust, then decide it no longer meets your needs, you may modify its terms or nullify the arrangement, as long as it’s revocable. You can also create an irrevocable trust that can’t be changed. If there’s even a chance you’ll want to change the arrangement, your attorney will help ensure the trust is revocable.

If you want to create a living trust, turn to Hawaii Convey in Honolulu. This law firm focuses on estate planning and has been in business for over 30 years. These attorneys help their clients create wills and trusts to get their affairs in order, implementing practical legal solutions to protect their estates. Get more information about their services online, or call (808) 792-8777 to request a consultation.