A legal document created when the owner of the assets is still alive is known as a living trust. It is similar to a will since it gives an explanation on your wishes regarding your assets, dependents, and your heirs. The main dissimilarity between a will and a living trust is that a will becomes active only after you die and after it enters into confirmation. The length and costly verification process can be avoided when one considers living trusts.
Moreover, if at any particular moment a person becomes disabled and are unable to manage their dealings, then at that time it is the most appropriate time for your successor trustee to step in and manage them on your behalf. There exist two types of living trusts that one needs to understand . A revocable living trust enables the trustee to retain full control over the assets in your trust. Revocable living trusts are subject to alterations. Besides, it is vital to understand that the person’s assets in the trust evade confirmation process by passing directly to your heirs when you die. One has no control of his assets in an irrevocable trust. The fact that a person no longer owns the property, therefore, those assets are no longer reflected part of your estate and won’t be subject to estate taxes.
Most people prefer living trusts due to some of these grounds. First, living trusts provide for minor children or family members who have no knowledge and skills or unable to handle financial matters. They are guided by a trustee who has a great experience in matters regarding the distribution of assets. Second, it is vital to understand that living trusts provide for management and organization of individual assets in the case one has no capability to handle and manage his or her assets on their own. Third, it is one of the major ways to avoid confirmation costs and delays, resulting in the instant transfer of your assets to your beneficiaries. Evasion of payment of acceptance costs is possible with living trusts.
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Fourth, living trusts act as one of the private act a person can opt to take in that it hardly involves members of the public. The only needed person from outside is a trustee who does his things privately. Will creation is not private. Planning process of living trusts involves evasion of payment of estate taxes.
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Personal reasons enable one decides on whether to create a will or a living trust. Before making any decisions, consult with a qualified estate planning attorney. Before one considers taking up living trusts it is important for one to plan to consult a planning lawyer to give out all the necessary directives. Persons planning to safeguard confirmation costs along after death need to consider choosing living trusts. Living trust simplifies the process of property transfer to the recipients.