You have worked hard to earn your success over the years. As you advance in age and experience, it’s natural to consider where your assets are going to go after you pass on. Do you plan to leave it all to your spouse? Do you want to divvy out cash stipends to your grandchildren when they reach college? These are things that can be handled with a trust.
We have already explained the key roles people will play when you set up a trust, now let’s consider what type of trust will be a good fit for you. Often, people will choose to put their assets into a “revocable living trust”, due to their ability to be customized, and how easy they are to be settled.
The anatomy of a revocable living trust
When you set up a revocable living trust, you are creating a legal entity not dissimilar to a corporation. As the grantor, you will feed your assets into the trust which will then be distributed to your benefactors at a later date. Your trustee, often a reputable bank or attorney, manages these assets in the meantime.
These are called “revocable living trusts” because you establish them while you are alive, and you have the option to dissolve them at any time.
Benefits of a revocable living trust
There are several benefits that come with this type of trust, one being that you can set very specific conditions and parameters for when and how your assets are awarded. For example, you could state that when you pass away your home will go to your spouse. When they in turn pass away, it will then go to a specified child.
Trusts are also attractive if you appreciate your privacy; they never become public record. Only you, your trustee and the receiving benefactors will know their details. In this way, you can avoid potential in-fighting among family members, friends and business associates.
Placing your assets into a trust also minimizes probate after your death. Settling your estate with a well-managed trust can ensure that things go smoothly for your benefactors, and that your wishes for your assets are carried out with speed and efficiency.
It is important to remember that for as effective as trusts are once they're in place, initial setup up and management of a trust can be a complicated process. Attorneys experienced in estate planning are valuable assets to have on your side should you decide to go this route.
Having control over your assets and how they are dispersed is a good feeling. Knowing that your wishes will be carried out securely is the kind of peace of mind that only a living trust can provide. Continue to educate yourself and maybe even contact a professional if you think it may be the right answer for you.