With a living trust, a person places real estate, bank accounts, vehicles and other assets in trust during her or his lifetime. As a trust lawyer in Bergen County, NJ, from a firm like the Law offices of Joshua Kaplan can explain, this legal document explains how the individual wants to distribute the contents of the trust after death.
The Particulars of a Living Trust
Living trusts qualify as revocable trusts, as opposed to irrevocable trusts. This means the trust’s creator may change the document’s terms at his or her discretion. The individual may reconsider including a beneficiary, add a new beneficiary or change how to manage the trust’s assets.
A trust’s creator acts as the trustee, putting the person in full control of the trust and its contents. One unique way a trust differs from a will is that with a living trust, the trustee may name a successor trustee. This person serves as the trustee’s representative after she or he dies. The successor trustee also distributes the trust’s contents to name beneficiaries according to the trustee’s desires.
A successor trustee may “activate” if the trust creator becomes medically incapacitated. That means the successor takes charge of business assets and real estate under the trust creator’s documented wishes.
Advantages of a Living Trust
One of the biggest benefits of creating a living trust is unlike a will, a trust does not qualify for probate. That means trustees do not have to worry about their beneficiaries waiting longer than necessary to receive their inheritance. Trustees also sidestep the cost of the probate process, which may become considerable with a substantial estate.
Living trust creators also enjoy greater privacy. As public documents, wills become available for everyone to see, which opens the door to someone contesting a will’s contents. Probate court also becomes a public matter, which means public citizens may examine estate contents. Fewer people have access to a living will, which means a reduced chance of someone challenging the trust and preventing beneficiaries from receiving their inheritance.
Disadvantages of a Living Trust
Those who feel a living trust may fit their estate plan must understand its pitfalls. While online programs and tools let users create their own living trust, it’s better to work with an experienced legal professional. Online tools do not always account for nuances, which may result in an inferior trust.The downside of leaving the job to a lawyer is paying legal fees. Some companies offer employees legal plans as a benefit, which can reduce overall costs.
A living trust may offer a viable estate planning solution. Learning more about them from a living trust lawyer may help individuals make the most of their legal opportunities.