A living trust might be a great idea for estate planning and is a popular alternative to a traditional will; however, weigh the pros and cons with an elder law attorney and avoid living trust kits you can purchase online. In many situations, a living trust may not achieve the right result for you.
A living trust acts a mechanism to manage your property while you’re alive and after your death. A living trust is revocable, which means you can make changes to the trust as circumstances change. Most commonly the bulk of your properties are added to the trust when it is created; any omitted properties, for example, can be transferred to the trust at the time of your death with a Pour-over will, which should be established at the same time you create the trust.
A living trust works great if the estate is substantial and includes multiple properties If you wish to avoid probate to dispense your assets to designated beneficiaries, preserve the privacy of how your estate is divided, and avoid the cost of a second-state probate proceeding for any out-of-state property, a living trust might be a great idea as part of your estate planning. However, if you worry about the need for obtaining benefits such as VA or Medicaid to help pay for long term care needs, the assets in a living trust will be treated as if you still owned them. Therefore, there are often better solutions than living trusts.
While a living trust provides the same tax-saving provisions as a traditional will, it typically costs thousands more than a will. While the cost to probate a will in the event it is contested can be substantial, often the cost to administer a trust is similar to the cost of a probate. .
Joint living trusts provide a mechanism to combine the assets of a husband and wife into a single trust, but be careful. If estate tax minimization is a factor for combined assets greater than $10,000,000, be sure to work closely with an attorney who specializes in taxable estate planning in order to achieve your goals