Whether you have recently become married or retired from a career, you may feel inspired to get your affairs in order. Creating a comprehensive estate plan may seem overwhelming; however, there are documents you can put in place to make matters easier for your friends and family once you pass.
In addition to having a last will and testament in your estate plan, you may want to consider a living trust. This document can simplify the process of transitioning property and assets, and help to manage your estate even while you are alive.
What is a living trust?
A living trust is an entity designed to hold your property and assets, then distribute them to the proper beneficiaries once you pass. According to The Balance, there are two kinds of living trusts: revocable and irrevocable. While you can maintain possession of your property and assets until you pass with a revocable living trust, you relinquish ownership of your possessions immediately once they enter an irrevocable trust.
What are the benefits?
There are several advantages to putting your property and assets into a living trust rather than simply designating them in a last will and testament. Some benefits include the following:
- Keeping it private, as trusts are not a matter of public record
- Avoiding the probate process
- Easing the transfer of property to designated beneficiaries
A trust gives you control over how you would like your assets distributed and when. For example, you may choose to have your grandson’s inheritance only paid out for school tuition, given out in installments or paid in full upon graduation.
Although a trust is not ideal for everyone, it may offer benefits to your estate plan depending on your situation.