Why Setting up a Living Trust May Be the Smart Thing to Do
Some people think that only the rich and famous set up Living Trusts. Even though you might not be a millionaire, a Living Trust may be the right choice for you. There are so many goals you can accomplish with a Trust that I often recommend it to my clients.
Here are 11 reasons why setting up a Living Trust may be the smart thing for you to do:
Me, Myself and I. A Living Trust is typically set up to take care of you during your lifetime. With it, you keep unlimited access to the income and principal of your Trust, even if you become ill or unable to manage your own affairs for any reason.
Your Family. A Living Trust can provide for your partner and children in any way that you want and for as long as your trust assets last. For example, your Trust can be set up to take care of your spouse during your lifetime and after your death. It is also common for parents to permit trust funds to be used for their children's health, education, maintenance and support. This can be particularly important if your children (or other beneficiaries for that matter) are minors, bad with money, or have special needs.
Flexibility. If your Living Trust is revocable, you can put assets into your Trust, take assets out of your Trust, amend the trust terms, and revoke the entire Trust at any time.
Probate Avoidance. A properly funded Living Trust avoids the time and cost of probate court administration of your assets after your death.
Your Heirs. A Living Trust allows you, not the State of Ohio, to decide who will inherit your assets after your death.
Control of Your Assets. A Living Trust gives you the ability to control your own assets, even after your death. You can schedule trust distributions to your heirs long after you're gone and keep your assets in your bloodline.
Asset Protection. If drafted properly, a Living Trust protects your assets from your beneficiaries' creditors. Think about that. If your son goes through a divorce, your son's share of the trust can't be touched by his ex-wife. If your niece files for bankruptcy, her creditors are out of luck with respect to your Trust.
Privacy. A Living Trust is not a public document. On the other hand, probate administration is a very public process. Anyone can look at your Last Will and Testament at probate court, view the assets listed on the probate inventory, and review the fiduciary's account. Some people create Trusts just for the privacy benefits.
Trustee is in charge. The Trustee administers your Living Trust. You may serve as your own Trustee, and you also have the ability to name a relative, friend, trusted advisor, or bank as the Successor Trustee, taking over as Trustee if you become incompetent and after you pass away.
Peace of Mind. Setting up a Living Trust can give you peace of mind, knowing that your legal affairs are in order. Having a Trust and other estate planning documents in place will also give your family peace of mind and make things easier and less expensive for them when you are gone.
Tax Benefits. For the ultra-rich, there may be tax benefits from setting up a Living Trust.
You don't have to be rich to reap some of the benefits of a Living Trust. You can contact Maria to see if a Trust is right for you.