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Why You Should Consider a Living Trust?
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In order to figure out if a trust is for you, you have to understand what a trust does. A living trust is much like a will in that both instruments ensure your estate is distributed to your beneficiaries in the manner you choose, appoint managers (called trustees and executors) and are revocable. However, unlike a will, a living trust:
Like anything else, a living trust can appear to be complicated at first but it is quite simple. The trust will own your property and you will own the trust. When you create a living trust, you transfer your assets to your trust which you control so there is no danger of losing the property you placed in your trust. Further, since you don't own the property you transferred to the trust, there is no property for the courts to probate after you die. A revocable living trust avoids the probate of assets located out of state. A trust also allows you to keep control of your assets while you are living even if you become incapacitated through a successor trustee you appoint. Following your death, your desires for the distribution of the trust are carried out by person you designate as your successor trustee and no probate is required for this change of trustees. A surviving spouse can be put in charge of the trust, and to be able to use the trust for the spouse's own health, education, maintenance and support, as well as to be able to make payments to others. A so called "living trust" is made during your life and it can be fully amendable or revocable prior to the death of the first spouse to die. It will allow your heirs to avoid probating your assets and allow you to manage these assets in much the same manner as you currently has been. Your management duties and authority as Trustees will be essentially the same as they were before you establish the Trust. It is not necessary to obtain any special tax I.D. numbers or keep special types of accounting records other than careful records such as a prudent person would generally maintain regarding the management of his or her property. You are not required to file any special tax forms. Next: How can a living trust minimize taxes? |
