Estate Planning Lawyer
At some point in life, practically everyone wants to know what will happen to their estate after they die. One of the best ways to control this process is to create a living trust, advises an estate planning lawyer from a local law firm such as William B. Moore.
What Is the Purpose of a Living Trust?
A living trust is a legal document that settles what will happen to your estate after you die. Unlike a conventional will (not to be confused with a living will, which is a legal document that commands end-of-life care) that describes what you want to happen after your death, a living trust is legally binding, generally uncontestable, and avoids the need for a state probate court.
What Are the Advantages and Disadvantages of a Living Trust?
The primary advantage of a living trust is to avoid needing a probate court to settle your estate. If you do not have a living trust, you are legally required to use a probate court. A probate court will value your estate, transfer assets to your heirs, and make sure you pay your debts. This process can be lengthy and expensive and you will be required to foot the bill.
One disadvantage of a living trust is that it is costly and generally requires an attorney. Generally, the fee for creating a living trust starts at around $1,000. However, a living trust may be less expensive in the long run because you will not have to pay for a probate court.
What Are the Types of Living Trust?
There are two types of living trust: revocable and irrevocable. A living revocable trust can designate yourself as the trustee which puts control of all assets in your hands. The downside to this is that it leaves you vulnerable to estate taxes if, at the time of your death, your estate is valued above the state tax exemption. A revocable trust can be modified at any time. This type of trust is suitable for most people.
An irrevocable trust puts the control of assets in the hands of a trustee who is someone other than the grantor but provides distinct benefits such as reduced taxes. This type of trust can also be modified but only in certain circumstances. This type of trust is generally suitable for people with large estates who want to minimize taxes.
A living trust can be useful if you want full control of what happens to your assets after you die. If you want help with estate planning or to create a living trust, contact an estate planning lawyer with the know-how to properly handle the details of your estate.