The importance of a living trust for your financial future.
When it comes to building a secure financial foundation for you and your family, a good estate plan is a priority. Whether you have a modest amount in savings or a large estate, you’ve probably given some thought to what happens to your assets when you’re gone. Most people know they need a will, but securing a living trust is also a wise choice.
Estate planners often recommend living trusts as a viable option when contemplating the manner in which to hold title to real property. Those who establish the trust and transfer their property into it are known as Trustors or Settlors. The settlors usually appoint themselves as Trustees, and they are the primary beneficiaries during their lifetime. After their passing, their children and grandchildren usually become the primary beneficiaries if the trust is to survive, or the beneficiaries receive distributions directly from the trust if it were to close out.
While there are many additional benefits of securing a living trust, here are three of the most important:
It avoids probate. Probate is the process through which your estate is managed after you die. It’s completed through the court system, and executes your will, inventorying all of your property, paying debts, and distributing the money that remains. Probate is public, lengthy, costly, and may not be the way you originally planned. The biggest benefit of a living trust is that everything within the trust completely avoids probate.
It provides clarity. A living will addresses the following:
Which assets are left for whom?
Who are the successor trustees?
What should the money be used for?
At what age will children inherit the money?
The trustors are able to secure a high level of clarity and certainty so that the family is cared for.
It handles real estate transfers. If you own real estate in multiple states, you can avoid going through each state’s probate process by transferring those assets to a living trust.
A revocable living trust is a legal document that works much like a will, but it gives you more control, privacy, and flexibility. With a living trust, you set explicit instructions for the ongoing management and distribution of your assets, both during your lifetime and after your death.
For more information on how to help secure your financial future call our experts at Fidelity National Title!