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Spotlight on Living Trusts
Flexible living trusts (aka inter vivos trusts or self-administered trusts) can be extraordinary useful, given the right circumstances. The estate planning benefits, which generally include privacy and probate avoidance, are reasonably well known.
However, many people fail to take advantage of trusts because of a common fundamental misconception. "I know I probably ought to set up a living trust," they say. "But I don't want to lose control of my assets." They are often surprised when they learn how readily they can gain the benefits of a trust without any loss of control.
You Remain in Charge
When you place assets in a revocable living trust, you retain the right to cancel the trust or change their instructions, so as long as you are alive and competent. Nothing is tied up, so to speak. You act as your own trustee, meaning you hold legal title to the trust assets, you are the beneficiary of the trust, and you receive the income and principal from the trust. In most cases, clients start off by managing their trust assets themselves, though they reserve the right to delegate this responsibility to an agent in the future.
Protection
A living trust can be a strong complement to your will. A living trust may provide for beneficiaries just as a will does. The will may direct that estate assets to be added to the trust. Outright gifts may be made from the trust, or assets may be held in further trust for certain beneficiaries. Thus, a living trust can offer additional flexible estate planning strategies. And trusts have another important advantage over wills-they are harder for disappointed beneficiaries to attack. If you own real property in more than one state, a living trust is also an attractive estate planning tool as it can make it easier to transfer the title to the various tracts of real property after your death.
In Case of Medical Setback
No one can escape the risk of incapacitating illness or injury. In the event of incapacity, others must necessarily take control of your finances. Even so, a living trust allows you to pass control to a successor trustee of your choice- once again, you are in control. And in your living trust document, you establish the ground rules concerning how you want your finances handled at your incapacity.
Professional Estate Planning Required
Without a proper estate plan that might include a living trust-and other pertinent estate planning documents, such as durable powers of attorney and living wills-you could possibly leave the decision making authority for you and your assets, to someone you might not want to have it. Lastly, living trusts are akin to buying a car; it is a personal decision and it should be tailored to your specific needs and circumstances. We therefore recommend that you seek the advice of a competent attorney who practices in the area of estate planning and is familiar with the various nuances of revocable living trusts.
