When planning your estate, one of the most important elements you must pay attention to is how your assets will be transferred to beneficiaries after you die. Although the majority of people just depend on a will to dictate how assets will be disbursed, some turn to living trusts. An estate planning attorney McKinney can help you understand the benefits of a living trust for you and your heirs.
A living trust holds your assets while you are alive. When you die, these assets can be transferred to a named beneficiary by the individual or organization in charge of your trust. A living trust can be revocable or irrevocable. The following are the main reasons you may want to have a living trust:
Probate is a legal asset distribution process. However, probate can be lengthy and expensive. By placing your assets in a living trust, you avoid probate and your assets are passed down directly to the beneficiaries. With a living trust, the inheritance process becomes faster and simpler for all parties involved. Also, this means you avoid the costs of probate that could be taken from your estate.
Maintain Document Privacy
Every item in your will become part of the public record. Thus, individuals outside your family can learn the details of your estate after probate court. However, a living trust is private, so no outsiders can discover such information.
Drafting a living trust may cost more than drafting a will because of the complexity of the document. Also, you need to transfer your assets like bank accounts, bond accounts and certificates, as well as stocks to the trust through separate paperwork. Just writing up a living trust doesn’t fund the trust
Moreover, an estate plan with a living trust also includes changing the beneficiary on your life insurance policy to the trust and creating a “pour-over will” that will provide for the distribution of assets acquired after the living trust is created but before your death.
A living trust is made so your trustee can manage your assets right away when you become ill and incapacitated. If you only have a will without a durable power of attorney, the court will appoint a person to oversee your financial affairs who will need to report to the court for approval expenses, property sales, and other matters. By drawing up a durable power of attorney, including one for your health care decisions, you can avoid a court-appointed conservator for your affairs.