While living trusts constitute the foundation of many estate plans, some people are unclear about why having a living trust prepared is such a valuable estate planning strategy. Living trusts can provide a wide range of benefits for those constructing a Estate Plan, such as tax benefits, probate avoidance, protection from creditors and more. There are many types of living trusts so it is important to identify an individual’s priorities so that the appropriate living trust can be prepared which satisfactorily addresses these objectives. We have provided information that those considering Living Trusts need to know.
Why will a living trust prevent the need for probate?
While a will must be administered through the probate process, a living trust provides for a transfer of property placed in the trust without any court administration. The trustee appointed to handle the trust simply transfers the property to the beneficiaries of the trust according to the terms of the trust.
Are there reasons to avoid the probate process?
The probate process can entail delays in disposition of property to loved ones creating financial hardships for surviving family members, whereas there is no need for any lag time in distributing the assets in a trust to the beneficiaries of a trust. Living trusts also may provide a way to reduce or avoid estate and gift taxes depending on your situation.
What constitutes a living trust?
A living trust is a legal relationship created by a trust agreement that transfers legal ownership of assets to the trust to be held for the benefit of one or more beneficiaries. A living trust involves transferring assets into the trust while the trust creator is still alive (also called an “inter vivos” trust). Sometimes the person who creates the trust also can be the trustee, but the benefits provided by the trust differ depending on such decisions so it is important to seek legal advice when deciding how to set up a living trust.
Does the creation of a living trust eliminate the need to have a will prepared?
If you have a living trust, you may only need a very basic type of will referred to as a “pour-over will.” This type of will is designed to provide for the disposition of property that the trust maker fails to formally transfer into the trust.
Is It Time to Have Your Irrevocable Trust Reviewed by an Attorney?
The above information is designed solely to illustrate general principles of law, and does not constitute a specific legal opinion on individual cases. We suggest that you contact experienced legal counsel for a specific opinion tailored to your individual circumstances.
If you are considering setting up or updating your estate plan, Living Trust Lawyers at Life Leaf Legal Group, PC offer a free consultation in our centrally located offices in Santa Fe and Albuquerque so that we can discuss your specific situation. Call us today to schedule your free consultation at (505) 856-3591 to learn about your rights and options.