If you’ve heard of a living trust, then you may have assumed that you don’t have enough expensive financial resources or assets to warrant establishing one. Being someone of wealth isn’t necessary to warrant a living trust.
A living trust is an estate planning tool that you create while you’re still alive. It goes into effect after your death. There are few benefits to creating a living trust that you’ll want to be aware of in deciding whether it’s a good option for you.
A living trust can simplify the probate process
One primary reason individuals create living trusts is to pass their assets to their loved ones without being subject to probate. This is generally the process through which the probate judge validates your will, which is necessary before the distribution of any assets to your heirs.
There are many reasons why individuals might want to help your loved ones avoid probate. Generally, it drags out how long it takes to transfer assets to your heirs and involves administration costs and court fees that can cut into your estate value.
The living trust process preserves your privacy intact
Another benefit associated with creating a living trust is that it keeps your assets away from public view. Any legal process (like the validation of a will) that has to be handled by a judge generally becomes publicly accessible.
As with any estate planning document, there are certain requirements that you must follow to ensure that a living trust is legally binding or enforceable. You’ll want to take steps to learn what those are to ensure that your final wishes are carried out as you intend.