When it comes to estate planning, you might already be thinking of preparing a will. However, you could consider getting a living trust instead. An estate planning attorney can help you set up a living trust. It is important to have some tips on what a living trust entails so that you can make the best decision:
Benefits of Living Trusts
One of the reasons why you should consider getting a living trust is that it offers more benefits as compared to the traditional will. This is because the trust covers you both when you are still living as well as after you have passed on. The living trust will not be made public after you have passed on. This means that you will still maintain the privacy of your affairs.
Unlike wills, your living trust cannot be subjected to probate by those seeking to challenge its legality. Thus, using the living trust helps avoid the potentially expensive and time consuming probate process. This will also ensure that there are no family disputes since the trust lays out everything clearly. Another benefit is that you can make plans for how you will be cared for should you become incapacitated later in life.
How Living Trusts Work
As your estate planning attorney will advise you, the living trusts give you additional control over your assets. Should you pass on before all your assets are captured in the living trust, there is a provision for those assets to be incorporated in the trust. There is also the possibility of developing a revocable living trust so that you have more flexibility in making changes as you see fit. After you have passed on, the trust then becomes irrevocable.
With regards to paying taxes, you have to make payments on all the income you get from the assets in your living trust. However, the trusts are not liable to gift tax since you can change them at any time. The assets contained in the living trust will, however, be liable to estate tax after you pass on since you have not disposed of the assets as such.
Why You Should Get a Living Trust
Whether you are married or single, it is important to have a living trust. It can be a basic trust in order to avoid probate or it can be more detailed. For instance, if you are married, you can consider getting a marital life estate living trust. This will allow you to transfer your assets to your spouse quickly after death while saving on tax.
To learn more, contact a company like Cadwallader Law Offices with any questions you have.