Planning for your family’s financial future is a smart financial move. The living trust is a way to ensure future income. It can help your family’s financial security, as well as their emotional and physical well-being during difficult times.
The hardest time is the first 12-24 month after the death of a family member. Families deal with grief and try to adjust to a life without a loved one.
Not only does this cause emotional pain, but financial stress also begins to develop. This is especially true if the loved one was a major income source in the family. Some families struggle to deal with the stress of the loss and the legal and financial issues that will arise after a death.
To alleviate some of the legal and financial stress that comes with the death of a loved one, a living trust was established. The trust allows loved ones to avoid some of the legalities surrounding property transfers. Instead, they can more effectively focus on their grief and move toward healing.
A living trust is essentially a replacement for a Will. It works in the same way as a will and allows individuals to decide how their estate should be divided after his death.
It is not required to be probated, which is the main difference between it and a traditional Will. A living trust does not need to be probated.
Probating refers to the legal process of having the will of a deceased person examined by a court. The court determines the validity and interprets the will. The court appoints an executor to oversee the execution of the will.
Probate generally takes several months. It is not uncommon for probating a will to take more than a year. It is not unusual for the probating process, especially if there are large estates, to take many years.
This not only delays the execution of the final wishes of the deceased, but also causes financial hardship for the beneficiaries. They may not receive their share of an estate until months or even years later.
In the meantime, legal and living expenses increase. These expenses can’t be delayed until the inheritance is received.
Living trusts were created to remove the probating process. The living trust has five distinct advantages over a traditional will:
1) It can save legal and court costs: It doesn’t need to be submitted for probate through the court system. It can help the family of the deceased save thousands in legal fees.
2) Assets can be distributed quickly: It only takes a few weeks to several months to distribute the assets of the deceased through a living trust. This is quite a contrast to traditional wills which can take 12 months.
3) It protects your family’s privacy. Probate records can be viewed by the public. The distribution of assets in living trusts is, however, not public record. This instrument is appreciated by many people for the protection of their privacy.
4) A home can transfer to the living trust. This is not possible for people who have a traditional will.
5) Estate taxes can be saved: A living trust could save your family thousands or even tens of thousand of dollars in estate taxes depending on how large your estate is.
A living trust can be prepared in the same manner as a will. It does not need to be prepared by an attorney. It can instead be prepared by an expert.
You can also prepare it yourself. Once it is completed, it must be registered legally. There are different laws in each state and the documents that must be attached. Check the laws of your state.