Living Trust. One reason for setting up a trust is the protection it can provide should unforeseen circumstances occur. A living trust can protect you and your estate in the event you are rendered incompetent through an illness or accident. Without a living trust your assets could be at risk. Using a revocable living trust as part of an estate plan makes sense for many people, and it is important for anyone planning an estate to look at what living trusts have to offer. In the event you are incapacitated, the responsibility for the living trust can be passed to the backup trustee named when the living trust was set up. This helps to protect your assets while ensuring that those assets are used only for your care. Setting up a trust and transferring assets to the trust also protects them from probate. Many people who have made out a will assume that their assets will not have to go through probate, but this is not the case. Whether you have a will or not your assets will need to go through probate, an expensive and time-consuming process for your heirs. Setting up a trust also offers a great deal of flexibility, and the documents used to create the living trust can dictate how the assets will be handled upon your death. The trustee will be free to carry out your wishes without the need for an expensive and lengthy probate process. Setting up a trust is also a good way to protect your intended heirs in the event of divorce, lawsuits or other major life events. If the intended heirs are going through a divorce, an ex-husband or wife could end up with a large portion of the money intended for a son or daughter. With a living trust this unpleasant scenario can be avoided. The same holds true if the heirs are involved in a lawsuit. The money in the living trust can usually be protected from any judgments, protecting both your heirs and the money you have worked so hard for over the years. It is important to make sure that when setting up a trust it includes specific language that will provide this protection for your heirs, and it is important to spell out these possible scenarios when the documents are being drawn up. Setting up a trust can also be used for tax planning, and seniors whose estate exceeds the current tax-free limitations should be sure to explore these possibilities as well. Many people turn to living trusts for their tax advantages, and it is important for those with large inheritances to explore all the possibilities. Many people put off setting up a trust because they fear the cost will be prohibitive, especially for small estates. In fact the cost of setting up a trust can be quite reasonable for all but the tiniest estates. While fees will vary the typical fee ranges from several hundred to several thousand dollars. The cost will of course be affected by a number of factors such as the complexity of the living trust and the nature of the assets to be protected, but for most people setting up a trust is a very worthwhile investment.
Posted on: Tue, 03 Dec 2013 17:31:48 +0000
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