While making a last will and testament is a great way to start preparing for your death, expected or not, it is not your only option. A will is definitely a binding legal document when written correctly, but many people have circumstances that require a more complicated legal document to disperse funds or items to the desired parties. The best route to take in these types of situations is to set up a living trust.
What is a Living Trust?
A living trust details what you want done with your assets, dependents, and heirs once you die. This differs from a will because it bypasses probate, so the designated trustee (who you pick) carried out your instructions much faster. Another big difference is that it can also be done if you are still alive, but unable to manage your financial, healthcare, and legal affairs because of being incapacitated in any way.
Detailing the Benefits
As it was already mentioned, a living trust does not have to go through probate, which takes a lot of time. Probate can also accrue a lot of costs, and issues with lack of privacy control are also common in this process. There are other benefits though to setting up a living trust.
Setting up conditions. This is a great option for parents who worry about their children spending their inheritance too fast or on less than desirable purchases. Not everyone is responsible with money, so if you want to make sure that your son or daughter doesn't waste their portion and cause family problems, you can make sure that it is distributed in smaller amounts. Another common condition is to have the money put into a college account that is only accessible after a certain age. Basically, you can set the conditions that the money is received and used to give yourself some peace of mind that your money is being used wisely.
Donating on your terms. Setting up conditions for your family or friends is not the only way to set up terms. For instance, if you have a favorite charity or organization that you like to donate to, you can have it set up so your trust makes a monetary donation every year. Even if you aren't concerned about whether they will spend the larger sum responsibly, sometimes it is better for a charity for tax purposes to get a smaller amount each year.
More automation, less work. Since you can access a living trust while you are still alive, some people opt to transfer all of their assets into a living trust account before death. From this account, you can have all the automated disbursements made as well, making sure you take care of yourself and don't have to worry about keeping track of certain expenses.
How to Set One Up
The best way to set up a living trust is to contact an estate planning attorney, like those at the Beck Law Office PC LLO. Not only do they have the expertise to these complicated documents, but they know the best way to help you set things up exactly how you want it.