A Living Trust - What to Know
Who needs a living trust? A Will should be the basis of any estate plan. However, a properly prepared estate plan also provides for substitute management of your financial affairs in the event of a temporary or permanent disability as well as for a smooth and low expense transfer of assets upon death. A trust can accomplish these goals in your estate plan.
Because a Will does not become effective until your death, a Will does not control the management of your assets during your life. A living trust serves this function. To avoid the hassle and worry of managing substantial assets, some individuals establish a trust and hire a financial institution such as a bank to handle their investments for them. If you want to control your assets yourself, a trust is still beneficial because it can provide for substitute management in the event of a temporary or permanent disability. If you become unable to handle your affairs, the financial institution or individual you select as your successor trustee can take over the management of your assets and payment of your bills.
Trust assets do not become a part of your estate upon your death. An estate is a public record. Since anyone can walk into a probate court and look at your estate file, an estate does not provide for privacy of your financial and personal affairs. An estate can also delay the distribution of assets to your heirs and frequently increases the costs of settling your affairs. Since a trust is not filed in court, its terms are not public knowledge. Further, the trust can speed up the process of your selected heirs receiving their inheritance.
We hope this information will be useful to you as you consider your estate plan. If you have any will, trust, or estate planning related questions, contact Steven Knecht for a consultation.