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You have the foresight to take care of your family after you die. Research opens up the door to several options that include establishing a trust. As attorney Mike Donatt says, a living trust is not just for people who want to take care of family members.
“Trusts offer you the opportunity to improve the management of your personal assets, especially your home and t land that surrounds it,” Donatt said in a recent interview. “You also can create a trust to help family members manage your assets in the case of death or serious mental and/or physical impairment.”
Donatt also emphasized that trusts are not for everyone. He advises many of his clients to implement other types of estate planning tools to take care of family members after death. The question for people who want to plan for estate succession remains “Is a living trust a good idea.”
What is a Living Trust?
A trust essentially represents the legal transfer of a title from the owner of the title to an individual or an institution. A trustee administers a trust in accordance to the legally created terms that refer to one or more beneficiaries. As an estate planning tool, a trust benefits heirs when you are alive, which makes the estate planning tool a bit different than other estate planning tools, such as a will. Several factors come into play for deciding whether to set up a trust. You have to consider the size of your estate, as well as your age and your marital status. Every state has adopted unique laws that govern the creation of trusts. However, a growing number of states follow the statutes set forth in the Uniform Trust Code. Licensed estate planning attorneys set up several different types of trusts, including AB, living, and charitable trusts. The type of trust you want to create depends on your estate planning goals.
Is a Living Trust a Good Idea?
Although living trusts provide many estate planning benefits, Mike Donatt makes sure to explain the disadvantages of setting up the estate planning tool. A living trust requires regular maintenance to ensure the terms follow rapidly changing estate planning laws. Most people still in the workforce do not have the time or knowledge to manage living trusts properly. Donatt also stresses living trusts are more difficult to change and virtually impossible to change, without the help of an estate planning attorney. “When you create a trust, you need legal advice on how to perform the routine management required under state law,” said Donatt. “If you are under the age of 55 and considered healthy, you probably do not need a trust. If you are married, there are a couple of other easier options for ensuring the timely transfer of property.” Creating a trust also costs more than setting up other types of estate succession plans. Moreover, small estates typically encounter no legal roadblocks in probate courts, which make establishing a living trust unnecessary. For large estates, a living trust is an excellent option for managing a substantial amount of personal property.
Although some living trusts do not require the legal expertise of a licensed estate planning attorney, the process typically is more complicated than simply moving through a case through probate court. If you have a large estate that includes several complex legal issues, you should contact an experienced estate planning attorney for a free consultation. After your initial visit with an accomplished estate planning attorney, you should have a clear answer to the question “Is a living trust a good idea.”