Should You Get a Living Trust?: Top 5 Benefits You Must Know
Most people think they don’t need a living trust because they’re not wealthy. However, there are many benefits to having a living trust, even if you’re not rich.
This blog post will cover the top five benefits of having a living trust. If you’re on the fence about whether or not to get a living trust, read on to learn more about why it might be right for you.
What Is a Living Trust?
A trust is a legal settlement in which one person (the trustee) holds property for the benefit of another individual (the beneficiary). A trust can be set in a person’s lifetime or made part of a will.
To be more precise, a living trust is a trust that is created during a person’s lifetime. The trustee of a living trust can be the same person as the trust’s creator (also known as the grantor or settlor) or someone else. The beneficiary can also be the same person as the grantor/settlor or someone else.
When drafted well, a living trust can serve you various legal advantages besides protecting your assets. Here are the top five benefits of having a living trust:
1. A Living Trust Avoids Probate
One reason is to avoid probate. Probate is the legal system that takes place after someone passes away. If a person dies without a will or has a choice, but all of their assets are not in their name alone, they must go through probate before giving them to their heirs.
By putting assets into a living trust, they can avoid probate because the assets in the trust do not belong to the grantor/settlor anymore; they belong to the trustee. The trustee can then distribute those assets to the beneficiaries without probate court.
2. A Living Trust May Save Money
A living trust can also cooperate to protect assets from creditors. If a person dies of debt, their creditors may attempt to seize their assets to satisfy the debt.
However, if those assets are held in a living trust, they may be protected from creditor claims. For all these reasons, setting up a living trust with a trust attorney can be an excellent way to save money.
3. A Living Trust Protects Your Privacy
One of the edges of a Living Trust is that it protects your privacy. Unlike a Will, which becomes a matter of public record after you die, a Living Trust remains private.
This can be necessary if you want to keep your estate planning matters confidential and out of the hands of nosy family members and friends.
Additionally, a Living Trust can help to protect your assets from creditors and lawsuits. Because you do not technically own the assets in a Living Trust, they are not subject to seizure by creditors.
4. A Living Trust Guarantees in the Event of Incapacitation
When most people think of trust, they think of it as something that takes effect after they die. But a living trust can be helpful while you’re still alive. If you become incapacitated, the successor trustee you’ve named in your living trust can step in and manage your property and affairs without going through the court system.
A living trust is revocable, which means you can change it anytime. So if your circumstances change, you can simply update your trust to reflect those changes. If you’re looking for a way to make things easier for your loved ones if something happens to you, a living trust with the help of a trust attorney is worth considering.
5. A Living Trust Maintains Peace of Mind
One of the most potent benefits of establishing a Living Trust is the peace of mind it can provide. When you plan a Living Trust, you name a successor trustee to manage the trust after your death. This means the court does not need to get involved in managing your assets.
By pre-planning who will receive your assets and when they will receive them, you can avoid potential conflict among your loved ones. Creating a Living Trust also allows you to take advantage of certain tax benefits, saving your heirs money in the long run.
Overall, a Living Trust provides certainty and peace of mind in an otherwise uncertain world.
If you’re still on the rail about whether a living trust is right for you, we hope this article has focused on some of the top benefits. Ultimately, the decision comes down to what will work best for your individual needs and goals.
Our Estate Planning Lawyers Colorado team would be happy to help you weigh your options and make an informed decision about estate planning and living. So, what are you waiting for? Give us a call today to get in touch with a trust attorney in Colorado!