As you embark on the estate planning process, it’s easy to become overwhelmed by all the options available to you. People are telling you what you need and how you should do things but it’s hard to know who to listen to and what’s right for you.
One thing you might have been told is that you should put everything your assets into a trust before you die. Why do people do this? What are the benefits?
What is a revocable living trust?
It allows you to put your assets into a trust that can be revoked, or amended, by you at any time you choose. You still have the benefit of everything in the trust such as your property and funds throughout the rest of your life. After you die, the named items in the trust immediately pass on to those named in the trust documents.
It can help you avoid probate
Following on from the above, one of the most attractive benefits of a revocable living trust is that it can help you and your loved ones avoid the probate process altogether. Because all your property is held in trust for your intended beneficiaries, it passes directly to them on your death. This means there’s no need to go through probate for distribution of your assets.
It’s important to bear in mind, however, that a living trust does not replace a will and this is still needed for anything else you don’t name in the trust.
Someone can manage your assets when you no longer can
In the event you’re no longer mentally or physically able to manage your assets named in the trust, your trustee can take these over for you. This is especially valuable if you have a business. If you find yourself incapacitated and no longer able to run your business, your trustee can pick this up and start managing it immediately without having to wait for probate.
Estate planning is a necessary part of life, no matter what assets you have. It’s always a good idea to take some time to plan what you want to happen to your property during your lifetime.