Estate planning can sometimes seem overwhelming, but it doesn’t have to be.
A living trust is an estate planning option that may be worth considering. It goes into effect while the person who creates it is living and it can be revoked. The person who creates the trust is called a grantor, settlor or trustor.
A living trust designates a person who can manage the property and assets of an individual. The person who manages the trust is called a trustee.
Trusts must be funded, which means that the person’s assets must be put into the trust. A living trust provides the trustee with instructions about how those assets should be administered during the trustor’s life and after his or her death.
The trust’s beneficiary is the person who receives the assets or income designated in the trust. Many people choose to include their spouse and children as the beneficiaries of a trust.
Benefits of a trust
One of the primary advantages of using a trust is to avoid probate. Probate is a legal process where the court is involved in administering and managing the estate of a person who is deceased.
When a trust is in place, no probate is necessary because the trust owns the person’s assets and they are distributed according to the instructions in the trust. In addition, trusts are not a matter of public record.
With a will, unlike a trust, anyone can visit the courthouse and review a person’s probate file. A trust provides privacy about the value of the estate, personal information about the trustor and the names, addresses or other information about the beneficiaries.
An experienced estate planning attorney can offer advice about the best type of plan for each individual.