Estate planning attorneys at Nirenstein, Horowitz & Associates can provide assistance with determining if trust creation is the right course of action for you. There are a wide array of different kinds of estate planning tools, and trusts are just one of many ways you can provide for your family and protect your assets. However, because trusts are versatile, powerful and give you substantial control, trust creation is common during the asset protection and legacy planning processes.
Those considering creating a trust will also need to determine what type of trust is best suited to their particular situation and is most likely to help them accomplish short-term and long-range goals.
Many clients ultimately make the decision that a living trust is the right choice for them. A living trust is one of the most effective tools that makes up a comprehensive estate plan. If you are not certain if the creation of this type of trust is right for you, here are five key reasons why creating a living trust makes a lot of sense.
A Living Trust Allows You Continued Control
There are certain kinds of trusts which require you to take a very hands-off approach to managing assets held within the trust or which require you to give up control entirely. For example, if you create a trust for purposes of protecting assets while qualifying for means-tested Medicaid benefits to pay for nursing home care, your trust will accomplish this goal only if you no longer have access to trust assets and have made the trust irrevocable. A living trust, however, gives you certain protections while allowing you to still be in charge of what happens to your money and property.
A Living Trust Can be Modified as Required
A living trust is a very flexible type of estate planning tool, as opposed to an irrevocable trust. If you need to modify or end the trust, you can do so at any time. Many people create living trusts and have their trusts in place for many years– so having flexibility to control the trust and adjust it as needed as your life changes is very important.
A Living Trust Provides Protection in Case of Incapacity
Protecting your assets in case of incapacity is important, and a living trust helps you to do that. You can ensure that your wealth is safe from loss that could occur due to mismanagement or a delay in a trusted person taking control of assets in the event you become incapacitated.
When you have made a living trust, you can name a backup trustee who takes charge of trust assets as soon as something happens to you — assuming you named yourself the primary trustee and were in control until such time as you become incapacitated.
The designated person who you have put in charge of the management of the trust assets will be able to quickly act as soon as you no longer are able to actively manage the assets. If you had no incapacity plan in place, your family could be forced to go to court to have a guardian named, which is a process that takes time and could result in mismanagement of assets in the interim. A living trust allows this undesirable outcome to be avoided.
A Living Trust Allows You to Select a Trustee
If you have created a living trust, you get the opportunity to choose the person who will act as backup trustee. This means you, not the court, gets to select who manages your assets held in the trust if you become incapacitated. Creating a living trust also gives you the power to designate a trust administrator who will oversee the process of transferring trust assets to new owners after you pass away.
A Living Trust Allows Assets to Transfer Outside of the Probate Process
Transferring assets through the probate process can be very time-consuming, putting family members in a difficult situation if they’re waiting for an inheritance. When you create a living trust, assets can transfer through trust administration, which is much quicker and which typically costs less.
Getting Help from Estate Planning Attorneys
Estate planning attorneys at Nirenstein, Horowitz & Associates will discuss all of the pros and cons of creating a living trust and will help you to make a fully informed choice about whether this type of trust is a tool that should be considered part of your estate plan.
Contact our firm today to find out more the myriad ways we can help with you with the selection of estate planning tools and with the execution of your plan. You can give us a call at 860-548-1000 or contact us online for help.