We rely on living trusts as the centerpiece of many estate plans. This is in part because a Living Trust is simply an agreement made during one’s lifetime between the grantor (the person making the trust) and a trustee (the person who agrees to act on behalf of the grantor). Often the grantor and the trustee are the same person. Just as agreements can be tailored to fit many different needs, trusts can used to perform many different tasks. Although there are many different types of Living Trusts, each Living trust will be either Revocable (those which can be changed during the grantor’s lifetime) or Irrevocable (those that cannot be changed). Different types of trusts include, life insurance trusts, testamentary trusts, marital trusts, discretionary trusts, charitable trusts, supplemental needs trusts, family trusts, etc.
Living Trusts are not just for the very wealthy even though they do help preserve assets being passed from generation to generation. Some of the reasons to choose a Living Trust rather than a Last Will and Testament are:
- sophisticated tax planning
- owning real estate in more than one state
- facilitating the transfer of assets upon death or disability
- avoiding probate (the process of recording your Will with the Register of Wills to have a personal representative appointed).
Living Trusts facilitate the transfer of assets after one’s death because the trustee is already appointed (no need to probate)and ready to act on behalf of the grantor. Likewise, a trustee can easily sign legal documents on behalf of the grantor if the grantor becomes disabled. Of course, a Living Trust is not for everyone as it is much more complex than a Will and more costly to prepare. If you are considering a trust, call Schneider and Dodsworth today.