Did you know that only 45% of American adults have wills?
An estate plan allows you to plan so your family and loved ones aren’t stuck trying to piece things together after the fact. Are you currently without an estate plan? Perhaps you’re still wondering what is a living trust.
Keep reading to learn more about this estate planning tool and why it might be a perfect fit.
Understanding the Basics of a Living Trust
A living trust is an important tool used to manage assets during the life of an individual. It can be used to provide protection of assets, reduce taxes, and make provisions for the distribution of those assets to beneficiaries upon the death of the individual.
The trust document specifies the entities or individuals that will benefit from the trust and outlines the rights of those recipients. It is also used to appoint a trustee to manage the trust and its assets.
A living trust allows for more control over assets and can provide more options for distribution upon death. Understanding the basics of a living trust can help ensure your wishes are fulfilled and that your estate is carried out as you intended.
Benefits of Having a Living Trust
Having a living trust can be one of the wisest decisions you make during your lifetime. The living trust benefits provide a more secure and hassle-free asset protection plan that can be tailored to your particular needs.
Additionally, you are freeing your beneficiaries from legal hassles and delays often accompanying the probate process.
Different Types of Living Trusts
There are several different types of living trusts, each designed to meet a certain need or to pass on assets in a certain way.
The revocable living trust allows the trustor to change the terms of the trust during his lifetime and to revoke it all together during that time; the irrevocable living trust does not allow for modification of its terms.
Charitable trusts are also established to fund 501c3 organizations, while pet trusts ensure pets are properly taken care of in case of the grantor’s demise or incapacity.
When to Create a Living Trust
Creating a living trust is the key to ensuring that assets pass on to an intended beneficiary when you pass away. If you are in poor health or have assets worth more than $10,000, it is better to create a living trust sooner rather than later.
If it is set up properly, your trust will avoid probate court and ensure that your assets are passed on quickly and without hassle.
Additionally, creating a living trust can help avoid probate and reduce estate taxes. If you need assistance creating a living trust, then it may be beneficial to visit https://www.peaktrust.com/nevada-office/ to help you out.
At Peak Trust, they can help you decide when the right time to create a living trust is, based on your situation and needs.
All About Knowing What Is a Living Trust
So, what is a living trust? It is an effective, simple, and efficient way to transfer assets to your heirs. Knowing your rights and responsibilities as a trustor is integral to establishing a successful living trust.
As always, it is important to speak with a qualified financial advisor or attorney to ensure that your trust makes sense for you and your family.
Start learning more today and let the experts guide you towards a secure future.
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