What is a Living Trust?
A living trust is designed to pass your assets to your loved ones as you planned as well as eliminate the delay and cost of probate. Simply put, you create your living trust, you then transfer ownership of your assets to the trust, which you manage as the trustee.
- Those assets pass to your designated beneficiaries upon your death.
- If you become incapacitated or no longer want to manage your trust assets, the successor trustee you designated can take over the management of the assets for your benefit and then distribute them in accordance with your wishes upon your death.
- When you prepare your living trust, you will identify your beneficiaries as well as the person who will carry out your wishes, your successor trustee.
There are many benefits to having a living trust
- A trust allows for quick and easy transfer of property to your heirs.
- If you and/or your spouse become incapacitated, having a living trust means that your successor trustee will be able to seamlessly assume management of your estate—paying bills, dealing with financial institutions, social security and insurance agencies.
- It means your heirs will avoid the long and confusing probate process.
- During the probate process, your estate becomes a matter of public record; a trust ensures that it remains private.
How can a trust help with incapacity?
If you become sick or incapacitated and unable to make decisions for yourself, then the successor trustee you named in the trust document will take over the management of the assets in the trust, such as your house and trust-owned bank accounts.
- Without a living trust or other legal documentation in place, a court would have to appoint a “conservator” (like a guardianship, but for an adult) for you to make decisions on your behalf.
- Most people would prefer to name someone they know and trust rather than leave it up to the courts to decide.
- A petition for conservatorship takes time and money, which can be avoided with the living trust.
A note of caution: You’re the owner of your estate-planning documents
Your trust, power of attorney and other estate-planning documents are not filed with the county or other government agency. If you can’t find your trust, it doesn’t exist. Once you complete your living trust, Guideway prepares a bound copy of your legal documents for you. You will also be given the trust as a pdf file. Keep your trust in a secure place and share its location with a family member or someone you trust.
To keep in mind: Update your legal documents with life changes
If your successor trustee is your 70-year old Uncle Joe who’s a financial whiz, he’s probably a good choice. However, is he still going to be a good choice ten years from now? Your trust documents need to be reviewed with life changes, and this is one of them. Uncle Joe still may be enjoying robust health, but he also may have become frail, unable to take on the responsibilities of what can be a demanding role.
A birth, death or marriage can all change or affect your existing beneficiaries. It’s a simple process to update or restate your trust, and Guideway can help you with this—even if we didn’t create the original document.