A Living Trust is one of the most common estate planning tools used today.

Just like a Will, it legally documents what you want done with your  assets, your dependents, and your heirs once you’re gone. IT’S VERY Senior couple doing the income tax declaration onlineIMPORTANT TO NOTE: one of the main differences between a Will and a Living Trust is that a Will only works after you die and has been entered into probate. A Living Trust bypasses the expensive and burdensome process of probate, allowing your successor trustee (who is basically the same as an executor of a Will) to carry out your instructions as documented in your living trust upon your death – and if you become unable to manage your financial and legal affairs due to incapacity.

 

A Living Trust names three different parties:

The Grantor: The grantor is the person or couple who establishes the Trust. This can also be referred to as the Trustor. This is you.

The Trustee: The Trustee is the person named by the Trust as the controller of the Trust’s assets. The initial Trustees are usually the same people as the Grantors – you. The Successor Trustees are the people you appoint to take over management of the trust on your incapacity or death.

Beneficiaries: The beneficiaries are the heirs who will receive the assets and benefits the Grantors set for them in the Trust, after the Grantors have died. The Grantors may make a wide variety of special provisions for the beneficiaries, such as age restrictions for young or irresponsible beneficiaries, and special needs provisions for handicapped or disabled beneficiaries.

 

There are two types of Living Trusts 

 1. Revocable Living Trust: A “Living Trust” is a trust you set up while you are alive. A “revocable” trust can be changed by you at any time. 1111With a Revocable Living Trust, you transfer your assets into the ownership of the trust. You retain total control of those assets, as you are the trustee of your Living Trust. Again, you can change or cancel your Living Trust at any time. The assets in the Trust pass directly to your beneficiaries without going through probate upon your death, and are subject to any special provisions that you create.

2. Irrevocable Trust: An Irrevocable Trust is a trust you set up while you are alive and cannot change. Basically, you are giving away the assets you put into this trust. After you give away these assets, you usually have no control and interest in the assets. As a result, these assets are no longer considered part of your estate, and aren’t usually subject to creditor claims or estate taxes. An irrevocable trust is usually only used for estate tax planning or asset protection, and is not appropriate for most people.

The cost of a Living Trust or any estate plan depends on what we recommend for you and your family. After your free consultation we always quote a fixed, flat rate for your Living Trust estate plan. You can contact us for a free consultation to determine what is best for you and your family, and how to set up your custom Living Trust estate plan (which normally includes back-up Wills, powers of attorney, Advance Health Care Directives, and real estate transfer deeds).

 

Contact us to find out if a Living Trust is right for you and your family.

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