It is estimated that about 20% of Americans now have living trusts as part of their estate plans. Maybe you’re wondering whether you should, too.
There are a number of benefits that a living trust provides. Avoiding probate, time and costs savings, as well as protection of privacy are just a few benefits to consider. The professionals at Estate Planners of Arkansas are happy to assist in the process of setting up a living trust. But first, let’s discuss some basics.
What is a Living Trust?
A living trust is a written legal document through which your assets are placed into a trust for holding rather than directly keeping it in your own name. The living part of the title comes from the fact that it is meant to benefit you while you are still living in contrast to different types of trusts, such as an irrevocable trust.
As long as you are alive and mentally competent, you retain the right to control and change the trust. A trust can be fluid and malleable to your wishes, and can be adapted to suit you in your different stages of life. Upon your death, the trust is transferred to designated beneficiaries by your representative, called a “successor trustee.”
Benefits of a Living Trust
The main benefit to a living trust is keeping your assets out of the probate court system. Unlike a will, which has to go through the probate process to determine its validity, the successor trustee will distribute your assets according to your instructions. This avoids probate costs which could include will contests that could hold up the distribution of assets for months or even years.
Another benefit of a living trust is that you maintain control over your trust during your lifetime. This gives you additional flexibility in estate and gift tax planning.
In short, with a properly structured trust, you can continue living without any noticeable changes to your daily life other than the feeling of security that you get from knowing your family is provided for. A well-structured trust can give you peace of mind.
Finally, the level of privacy offered with a living trust vs. a will is another benefit of a trust. As a living trust is not made public, upon your death, your estate will be distributed in private. A will, on the hand, is public record and so all transactions will be public as well.
Living Trust in Arkansas
Because of the cost and length of the Arkansas probate process, families of all income levels and means should consider using living trusts in their estate plans. While trusts are more legally complicated than wills, your attorney will guide you through the process and take care of the formalities. All you need to do is decide what your goals are.
To learn more about the potential benefits of a living trust or to get started, contact Estate Planners of Arkansas, P.A. now for a free consultation at 501-414-8965.