What is a living trust?
By definition, a living trust is a legal document that helps you state:
– Who will manage and distribute your property in case you become unable to do so
– Who is the person that will receive your property and assets when you pass away.
By signing the document, you transfer ownership of your assets into the trust, but you still keep complex control over you assets. A living trust lets you continue managing your assets as you wish including opening bank accounts, making investments etc.
The living trust can be amended, changed or even revoked at any moment. Once signed, it will just stand with your other documents and do its job only if the situation requires it. It can be managed and distributed without being necessary to involve the probate court.
Why should you have one?
Because a living trusts offers you the possibility to make sure that the right people receive your assets without having to wait a long period of time and spend money in court.
Can I transfer property into and out of the trust while I’m alive?
You can transfer your property into the trust and out the trusts whenever you want if you have an individual trust. If there is a shared trusts, you have to obtained consent from your co-trustee.
Do I still need a will if I have a living trust?
Taking into consideration that your property may not be transferred into the trust while you are still alive, you still need a will even if you have a living trust. Such a document will transfer property that is still in your name into your trust and will allow you to name guardians for minor children if the situation requires it.
Aren’t living trusts just for the wealthy?
Living trusts are for everyone, no matter their wealth and income. A living trust is an efficient way to make sure you provide for your family in case you become disabled, without being necessary to lose time and money through probate court.
Will it remain legal if I move to another state?
No matter where the living trust has been created and signed, it is valid in all 50 states. It is important to keep in mind that any new property bought in a new state needs to be transferred into the trust.
Do I need a lawyer to prepare my living trust?
It depends on the complexity of your property and if you consider you want to take care of it yourself or hire a professional. Generally, setting up a legal trust is pretty simple, but if your property is large, or complex, or you have a child with special needs in your care, you should consider consulting an attorney.
Living Will vs. Last Will
A last will and testament is a legal document you can use to specify:
- How you want your property and assets to be distributed and managed after you die.
- A guardian for your minor child or children.
- Person or persons that should be responsible for carrying out the will’s provisions (executor).
In the absence of such a will, the person or persons that will receive your property are decided by the state. Laws defining proper execution of a testament or last will are present in every state. Beyond eventual differences, they all generally include provisions regarding the mental health of the person signing the will and the presence of witnesses at the document’s signing.
How Does a Last Will Work?
The role of the last will is to allow the testator, who is the person writing the will, to name an executor of the state to administer the provisions of the will, including: paying any outstanding debts or taxes of the state, taking care of the accounting records and gathering all the estate’s property, and distributing the property to the decedent’s beneficiaries as named in the last will.