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A living trust is an estate planning document that holds your assets in a trust during your lifetime. When you die, these assets will be transferred to the beneficiaries of your choosing. While living trusts are a little more expensive to establish than wills, they may have more benefits in the long run.
Here are some of the benefits of having a living trust.
Avoid Probate
Probate is a legal process in which a will is proved to be valid. It can be a long and tedious process. If an issue arises, it could potentially take months for your beneficiaries to receive their inheritances. If you put your assets in a living trust, you can help your beneficiaries avoid the probate process. Instead of waiting for months to receive their inheritances, they may receive them in merely weeks.
Increase Privacy
If you’re a private person, you’ll appreciate living trusts even more. Because a living trust doesn’t have to go through the probate process, it doesn’t become part of public record. This means that no one will be able to search public records for information about your estate.
Protect Minor Children
If you have minor children, you certainly want to leave them something if you die unexpectedly. However, young children aren’t mature enough to handle large amounts of money by themselves. If you put their inheritances in a living trust, it will hold the money until they are old enough and responsible enough to handle it on their own.
Reduce Estate Taxes
If you have a standard will in place, your loved ones may have to pay hefty estate taxes after you die. A living trust, on the other hand, can help them save money on estate taxes so that they can use more of their inheritance money on themselves.
Protect Yourself
A living trust also comes in handy if you become physically or mentally incapacitated. The person you select as successor trustee will step in and manage your affairs, including your own medical care, without the intervention of a court.
Protect Adult Kids
If you have adult children who are bad at handling money due to a drug problem or other issue, it makes sense to put their inheritance in a trust. The person you choose as the successor trustee can hold the money in trust and distribute to your child as needed.
If you’re considering establishing a trust, you should consult with an experienced estate planning lawyer in Rolling Meadows, IL. Trusts are very complex legal documents and you don’t want to risk making a mistake. They have helped hundreds of individuals create living trusts and are more than happy to assist you. We encourage you to call today to set up a consultation.
Thanks to Bott & Associates, Ltd. for their insight into estate planning and benefits of having a living trust.