When it comes to preserving your estate, there are many advance preparations that need to be done. One of the things that should be at the top of your list is creating a living trust.
What is a living trust?
A living trust or a revocable living trust is an agreement that allows a person to assign someone to manage their estate while they are alive. It is revocable because you establish this while you are alive but you can also dissolve this trust as you deem fit. Of course, the requirement is for you to be mentally competent when you do so.
To establish a living trust, you need three parties. The first party is the creator or the one who owns the estate to be agreed upon. The second party is the trustee or trustees who will be in charge of managing the estate on behalf of the creator. If you are the creator, you can also assign yourself as the trustee and assign someone to manage your estate when you die. Some people prefer to do this to make sure that they get to handle their assets themselves while they are able to do so. Finally, the third part is the beneficiary or the beneficiaries. They will be the ones receiving the assets.
Why choose a living trust over a will?
A living trust and a will are the two different documents that essentially serve the same purpose. Both of them make sure that the estate of the creator is passed to its beneficiaries. However, they have differences that you need to take note of.
A living trust is chosen by some people because it avoids probate. Probate is the process of validating a will. Aside from avoiding this process, you will also get to avoid additional charges when you have assets in a different state. Another major reason why people choose a living trust over a will is to protect their privacy. For people who have large estates, making their will a public record does not seem to be an appealing idea.
However, a living trust is not always the ideal agreement to have. Because of the fees needed for it to be prepared, it’s not practical for people with small estates to pay for that much.
Do you need an attorney for a living trust?
A living trust sounds simple, but you shouldn’t do it yourself. So the simple answer of whether you need an attorney to set up a living trust is yes, you need one. Here are some reasons why.
- A living trust, like any other agreement, is technical. You need an attorney and a financial advisor to help you draft a living trust that is clear and unequivocal. When you have an attorney with you, you are assured that the living trust will not create any other complications caused by faulty writing.
- When you have a large estate, you might be overwhelmed with all its complexities and requirements. A living trust attorney will help you understand what you need to do and what a living trust will do for you.
- If you plan on having the condition and other beneficiaries aside from your spouse and siblings, you will need an attorney to help you create a seamless plan. Moreover, if you plan to have conditions like skipped generations, life insurance policies, and the like, you will be needing the assistance of an attorney.
- An attorney who has experience and expertise can help you understand and plan a living trust easily. Their exposure to different kinds of living trusts will be beneficial to you especially when they advise you on how to lessen the taxes you have to pay.
There are people who prefer to write living trusts on their own. There are also drafts and kits online offering help in creating a living trust. However, in technical writings like this, you will need an attorney to make sure that no vague statements are written. Yes, an attorney would mean additional costs on top of the already expensive living trust fee, but it will all be worth it especially when the living trust becomes effective. When it comes to legal documents concerning your estate, it is wise to get aid from people who are experts in legal matters.