A living trust is a legal file that creates a conviction for any assets you wish to transfer into it. Having a living trust has proven important when overseeing the transfer of your assets after your death. According to the living trust terms, you automatically become the grantor of the trust. On the other hand, the person that you entitle to allocate the trust’s assets after your death is referred to as the successor trustee. The successor trustee has the mandate to distribute the diseased assets in reference to the terms of your living trust.
Benefits of Having a Living Trust
A living trust has many advantages, but this is one of the main reasons most people consider using a living trust. It enables your successor trustee to instantly transfer the properties managed by a living trust after your death. Since your trust rather than your estate manages these properties and this helps you avoid the probate process. The probate process may be complex and time-consuming, hindering the properties going through probate challenging to get to any of your beneficiaries.
Showing up for your damage of capability
In case of any incapacity that hinders you from handling your assets yourself, a living trust guarantees you a chance to use your successor trustee to manage and administer the assets. The living trust immediately offers this upon appeal with no need to apply to the courts of authority, saving more time.
Helps to maintain secrecy in your private affairs
Considering a living trust to keep your assets after your deaths helps you retain privacy for your family. The general public has no access to search engines records to retrieve what assets you possessed and how they were transferred among your beneficiaries.
Monitoring the distribution of your property
A living trust gives directives on what happens to your assets after your demise. Even after your death, the living trust does not limit the distribution of your property to your beneficiaries instantly. If you have a listed minor as your beneficiary, you can select a trust within your living trust on behalf of the beneficiary until they can comfortably handle their inheritance.
Drawbacks of using a living trust
The living trust has proven to be of much help, although it has some drawbacks that may render it inappropriate for your estate scheduling desires. Here are some of the disadvantages.
Transfer of title
Assets owned via a title such as real estate have to undergo a legal change of title ownership. Therefore any of your properties you want the trust to hold will require to be accurately transferred to the trust.
The title transfer procedures are quite expensive, for you have to incur extra costs on additional paperwork and filling fees to record the changes with certified authorities. If you have several title changes, you have to make more additional costs, not forgetting the expenses of creating the living trust.
However, despite the pros and cons of using a living trust, it is a proven tool for your next estate plan to help you meet your specific needs.