There are a variety of different estate planning tools to help estate planners to come up with an estate plan that is best for them. A living trust is a one such estate planning tool that estate planners should understand and be familiar with.
What is a living trust?
A trust allows assets placed in the trust to be managed by the trustee for the benefit of the beneficiary. A living trust can help the estate planner avoid the probate process and may also have tax benefits as well. Estate planners and their family and loved ones may wish to the probate process because it can be time consuming and costly and may delay the receipt of assets by the beneficiaries as a result.
What are the benefits of a living trust?
In addition to making the transfer of assets less costly and time-consuming, trusts offer several other potential benefits including:
- reducing the tax burden to families and beneficiaries;
- providing greater financial privacy, as probate is a public process managed by the courts; and
- regulating the use of assets in the situation when the owner becomes incapacitated.
A living trust can be set up to accompany a will as part of an estate plan or alone. A living trust can also be revocable or irrevocable and there are technical requirements associated with trusts that estate planners should ensure they are aware of and that their trust complies with. Estate planning is intended to help the estate planner plan for the future. For that reason, estate planners should be familiar with all the estate planning tools and options that can help them do that.