A living trust is a very effective tool for a wide range of people. One of the major advantages is the streamlined estate administration process that these trusts provide. The trustee that will administer the trust steps into a turnkey situation, because the trust is the owner of the property.
Another benefit is the avoidance of probate, which is the estate administration process that enters the picture if you use a simple will to state your final wishes. It serves a purpose, because creditors can come forward seeking payment during probate. This being stated, it is a hassle for the rightful inheritors.
It will usually take at least eight months to run its course, and no inheritances are distributed during this interim. Expenses accumulate during probate, and in a real sense, the money is coming out of the pockets of the inheritors. Plus, probate records are available to the general public.
The probate court is not involved when a living trust is being administered.
Another benefit is the ability to safely provide for an heir that is not good with money. You can include a spendthrift provision that would protect the principal from the beneficiary’s creditors. It is also possible to instruct the trustee to make limited distributions over an extended period of time.
These are a few of the benefits that living trusts provide, but there are a number of others.
Shared Living Trusts for Married Couples
A shared living trust can be the ideal solution for married couples in many cases. If you and your spouse have significant jointly held property, and you are going to leave your respective interests to one another, a living trust can serve you well.
We should point out the fact that you lose no control of assets in a living trust while you are living. This type of trust is revocable, so if you ever wanted to dissolve the trust entirely, there would be no obstacles.
When you have a shared living trust with your spouse, you and your spouse would typically be co-trustees, and you would be the initial beneficiaries. You would be able to access all of the property that has been signed over to the trust at any time.
Each respective party could convey personal, separate property in a shared living trust, and they could name any beneficiaries that they choose.
The standard way to proceed would be to stipulate that the surviving spouse will become the sole trustee after a spouse’s death. In most cases, a successor trustee that was named when the trust was created would administer the trust after the death of the surviving spouse.
There is latitude with the way the trust can be constructed. We are looking at a standard model that would be used by many people, but you have options.
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You can see the schedule and obtain registration information if you visit our seminar page.
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