What are the benefits of a living trust?
A trust is established when a grantor, or the owner of property, gives permission to manage property to a trustee. The trust itself may also be known as the deed or declaration of trust and contains the rules outlined and determined by the grantor. The trustee’s responsibilities are to adhere to the terms of the trust, and to make certain to follow all appropriate laws. The trusts are often called “revocable trusts”, meaning that the grantor may void the agreement at any time.
Living trusts, also known as inter vivos trusts, are trusts that are granted while the grantor is still alive. They are commonly done to avoid probate proceedings, which often are expensive and time consuming. Living trusts are also beneficial to reduce tax burdens and may be used as a safeguard if the grantor’s health diminishes and he or she is unable to make important discussions regarding the property contained within the trust. By avoiding probate, which may take months, a trustee is able to transfer property as constituted in the trust upon death of the grantor often within weeks.
Living trusts can be time-consuming however, as a new deed must be created each time additional assets and property are obtained by the grantor. This burden may still be preferred over the costs and time wasted when property goes to probate when a living trust has not been established.
Although there are self-help books, websites and templates that may help guide someone trying to create a living trust, each situation is still unique, and state laws often vary. It may be wise to seek advice and guidance from a seasoned law professional familiar with estate administration to make certain that your trust is valid and formed properly.
Source: By findlaw.com, “Living Trust Information,” Accessed on Oct. 27, 2016