If you are considering writing a will and believe this will complete your estate planning, you may be overlooking a valuable and useful tool that can protect your family and your assets. A living trust can offer you an alternative for passing certain assets in your estate to your loved ones in an efficient and cost-effective manner.
You may be like many in Louisiana who believe trusts are only for the very wealthy. However, this is not true. In many situations, the use of trusts can be a prudent method for accomplishing your estate planning goals and protecting your loved ones from a long, expensive probate process.
What is a trust?
When you establish a living trust, the trust becomes the legal owner of any assets you fund to it. The trust holds your assets, and you manage them as its trustee. When you die, your successor trustee takes over the management of the assets according to any instructions your may have included in the trust documents. Since the assets belong to the trust and not to your estate, your heirs may have access to them right away instead of having to wait months or years through the probate process.
Living trusts can be revocable or irrevocable. If you want to retain control over your assets during your lifetime and have the option of removing them from the trust, you may want to use the revocable option. However, if your goal is to permanently move the assets from your name into the name of the trust, such as when you are preparing to qualify for Medicaid, the irrevocable trust may be the better choice for you.
Trusts can serve many purposes
You may have a child who is not ready to handle an inheritance. You can construct a trust to make prudent distributions of the assets instead of providing your heir a large inheritance at once. You may even wish to place conditions on the disbursement of assets from the trust. Many people use trusts to provide funds for a special needs child who depends on government programs that carry income restrictions. Since the trust is the owner of the assets, the assets will not compromise your child’s eligibility.
These are only a few of the options for living trusts. There may be other plans that are suitable for your situation. You can find much more information about this versatile estate planning option by speaking with a knowledgeable attorney