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Jasper L. Edwards
A living trust is a legal document that partially substitutes a will, but with certain advantages.
In the eyes of the law, it is considered a legal entity with the power to buy and sell
assets.
With a living trust, some of your assets are placed into a
trust that is administered for your benefit during your lifetime. These assets are then transferred
to your beneficiaries once you pass on. They may include properties, stocks or bank
accounts.
Most people usually name themselves as the trustee in
charge of managing their assets. However, you can appoint a successor trustee to oversee the
trust’s assets if you are ever unable or unwilling to do so.
The following are some of the main benefits of
a living trust:
Avoids Probate
Probate refers to the legal procedure of distributing
property after the death of an individual. During the process, assets are distributed amongst the
beneficiaries and all claims are resolved. In most cases, there are huge attorney and court fees
associated with taking a will through probate. In addition, the beneficiaries do not receive any
proceeds until the probate court approves their distribution. This entire process can take quite a
long time, ranging from a few months to several years.
With a living trust, your beneficiaries can simply go to
the bank and withdraw any proceeds left for them. They only need a copy of the trust, their
identification papers and your death certificate. All this is done in accordance with the trusts’
agreement. In the case of a regular will, your beneficiaries cannot attempt to withdraw any money
until the probate courts grants permission to the bank.
Offers protection against law
suits
Lawsuit protection is usually offered to married couples
whose assets are held between two trusts. For instance, a wife can be insulated from the acts of
her husband. However, the living trust should be properly drafted for lawsuit protection to
apply.
Sheltering your estate
With a living trust, you can shelter your entire estate or
just a portion of it. However, you will need to conform to certain IRS tax codes.
Helps to save money
Even though a regular will may cost less to draft, a living
trust will save your estate money after your death. This is because distribution of assets will not
go through probate. This means that you will not incur any court or attorney
charges.
A living trust is something that makes sense for most
people. Those with highly valuable estates should definitely have one.
RESOURCE BOX
Free Wills to Print provides detailed information on Free Wills, How to Write a Will, Last Will And
Testament, Living Wills and more.
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