A living trust is a will substitute. It is a trust that is set up during the life of the trust "grantor," the person creating the trust. A will (unless it contains a testamentary trust) generally provides for an immediate distribution of assets. On the other hand, a trust can control how and when your assets will be distributed. A trust can also protect assets from creditors of trust beneficiaries. Another major benefit of a living trust is that assets are distributed to beneficiaries without probate court oversight and its assocuiated costs and delays.
A living trust, by avoiding probate, also protects your privacy. Wills and other probate documents can usually be accessed by members of the public, so anyone can learn details about your assets and how you have chosen to distribute them. A living trust is a private document, the terms of which need only be known by the grantor, the trustee, and trust beneficiaries.
A living trust also allows you to plan for incapacity, In the trust document you can appoint someone who will manage your financial affairs when you are no longer able to do so. A financial power of attorney can serve the same purpose, but banks and brokerage firms often prefer to deal with the trustee of a trust as opposed to an attorney-in-fact appointed in a power of attorney. Additionally, with a trust you can name a professional trustee to carry out the terms of the trust, including the management of your finances during periods of incapacity. This may be a better option for you if you have significant assets or if you do not feel confident in the ability of a family member or friend to handle the task.
For more information, see the blog article entitled "Who Needs a Trust?"
A living trust, by avoiding probate, also protects your privacy. Wills and other probate documents can usually be accessed by members of the public, so anyone can learn details about your assets and how you have chosen to distribute them. A living trust is a private document, the terms of which need only be known by the grantor, the trustee, and trust beneficiaries.
A living trust also allows you to plan for incapacity, In the trust document you can appoint someone who will manage your financial affairs when you are no longer able to do so. A financial power of attorney can serve the same purpose, but banks and brokerage firms often prefer to deal with the trustee of a trust as opposed to an attorney-in-fact appointed in a power of attorney. Additionally, with a trust you can name a professional trustee to carry out the terms of the trust, including the management of your finances during periods of incapacity. This may be a better option for you if you have significant assets or if you do not feel confident in the ability of a family member or friend to handle the task.
For more information, see the blog article entitled "Who Needs a Trust?"
