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Estate planning can be a daunting process, especially for parents who want to ensure that their children are taken care of after they pass away.
While a will is a common estate planning tool, it may not offer the best protection for your assets nor your family's future.
That's where a living trust comes in.
In this article we will discuss the benefits of a living trust and why this just may be a better option than a will.
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What Is a Living Trust?
A living trust is a powerful legal document that allows you to transfer ownership of your assets to a trust during your lifetime.
As the trustee, you have complete control over what the trust contains, and after you pass away, the assets are distributed to your beneficiaries according to your wishes.
A living trust offers several advantages over a will, making it a better option for parents who want to leave their personal belongings to their children.
Let's take a closer look at everything a living trust has to offer.
Benefits of a Living Trust
Avoiding Probate
One of the most significant advantages of a living trust is that it avoids probate. Probate is a court-supervised process that can be time-consuming and expensive, tying up your assets in the court system for months or even years.
With a living trust, your assets are distributed directly to your beneficiaries without going through probate, providing a faster and more efficient distribution process.
Protecting Your Privacy
Another advantage of a living trust is that it protects your privacy.
When a will goes through probate, it becomes public record, allowing anyone to access and review the details of your financial affairs.
With a living trust, your finances remain private, ensuring that your family's business stays confidential.
Providing Continuity
A living trust can also provide continuity for your family if you become incapacitated.
If you're unable to manage your assets due to illness or injury, your successor trustee can step in and manage the trust for you, ensuring that your assets are dealt with according to your desires, even if you're unable to do so yourself.
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Greater Control Over Distribution
As a parent, you want to make sure that your children have the resources they need even after you are gone.
A living trust allows you to specify exactly how you want your assets distributed, providing you with more control over the process.
For example, you can set up separate trusts for each child, specifying what assets each child will receive and at what age, helping to avoid disputes or misunderstandings between your children.
Naming a Trustee to Manage Assets
Another advantage of a living trust is that it allows you to name a trustee to oversee your assets until your children reach a certain age.
This can be especially important if you have minor children who are not yet capable of dealing with their own finances.
With a living trust, you can ensure that your children's needs are taken care of until they are old enough to handle their money responsibly.
Resources Are Available
While the estate planning process can be intimidating, it's important to consult with an experienced estate planning attorney who can guide you and help you make the best decisions for your particular situation.
By leveraging a living trust, you can rest easy knowing that your assets will be distributed how you want, and your family's future will be secure.
Having Proper Legal Representation
Estate planning is not a one-size-fits-all solution, and everyone's needs are unique. That's why having a knowledgeable attorney in your corner is crucial.
They will help you work through the legal implications of your decisions and ensure that your intentions are accurately reflected in your estate planning documents.
Updating Your Living Trust
It's also important to keep your living trust up to date. Life circumstances can change, such as the birth of a child, divorce, or the purchase of a new asset. These changes may require updates, and it's important to work with an attorney to ensure that your living trust remains current.
A quick look at a will
A will is a legal document that allows you to designate how your assets will be distributed upon your death.
It's important to create and update a will regularly, as it gives you control over where your money and possessions go after you're gone.
Unlike a trust, a will has to go through probate.
During the probate process heirs and beneficiaries are usually the last to receive assets that you have placed in the will for them.
Creditors and taxes will be paid first, and any assets or funds remaining will be passed on to beneficiaries and then heirs.
If for some reason there is no money or assets remaining after paying creditors and taxes then your beneficiaries and heirs will not receive anything.
This is why in most cases having a trust is always better than having a will.
Plan for the Future Today
Planning for the future can be a difficult and emotional process, but it's important to start today.
A living trust provides greater protection for your assets and your family's future, giving peace of mind to you and your loved ones.
With a clear plan in place, your family will know exactly what your wishes are, and will be able to avoid misunderstandings or disagreements that may otherwise tear them apart.
Don't wait until it's too late. Consult with an experienced attorney now and start planning for the road ahead.
North Carolina Probate Solutions
We partner with probate and estate planning attorneys throughout North Carolina. If you would like us to put you in touch with an attorney to help you put in place a trust that will secure your assets for your beneficiaries contact us today.
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* NOTE: North Carolina Probate Solutions and the author of this article is not a licensed attorney or CPA. This post should not be considered legal or tax advice. Always consult an estate attorney or tax professional when needing legal answers and legal advice.
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