Estate planning is a very important topic for families, but dealing with plans for the end of one’s life is not the most popular or engaging subject as it forces one to think of their mortality and the loved ones left behind. However, when it comes to preparing for your family’s future as well as the protection of your assets, there are steps you should take, even if you don’t consider yourself wealthy. Creating a living trust is one way you can protect your assets before and after your death.
What Is A Living Trust?
The most basic element of estate planning is a will, but a living trust (specifically the revocable variety) can provide extra protection as well as more specific directions as to where your assets should be placed at the end of your life. In essence, the living trust is a document that puts your assets in your control for the remainder of your life and determines who controls them after your passing. The creator of a living trust will name themselves as the trustee and can choose a “successor trustee” who handles the distribution of your assets to beneficiaries should you become incapacitated or pass away.
Should You Have One?
There are a few noteworthy benefits to a living trust that may compel individuals to draft one for themselves. Compared to a traditional will, a living trust does not need to undergo probate, meaning that individuals can avoid the tedious legal processes used to evaluate the value of an estate; this also means that individuals who have a living trust can avoid the fees associated with such proceedings, as well.
Another benefit of a living trust is more privacy than the alternatives can provide. Where wills are public documents, a living trust is kept private, and in turn, the details of an estate are also withheld from public scrutiny.
If you are concerned about the future of your assets, a living trust may be a wise option, especially because having one means you continue to control your assets while you are able and you have the option to revoke it at any time. Keep in mind that there is a cost in working with an attorney to draft the trust documents but in many, if not most situations, the benefit of having one outweighs the cost to create one.
What To Remember
Simply having a living trust will not do you much good. In order to actually benefit from the document and ensure your assets are secured and properly distributed, you need to fund the trust and manage your assets accordingly. If you are unsure whether you have funded your trust, you can take a few steps to answer this question. Check the deeds of your properties to see if you have transferred them to your trust; refinancing a property could mean that the deed was put back in your name temporarily, and it is important to verify that it has been properly transferred back to the trust.
It is also a good idea to review your financial statements, assess your life insurance policy, and revisit your retirement plans and beneficiary designations. Taking these steps to confirm that your assets are properly contained within the living trust should not take too much time, and it will grant you additional financial security and peace of mind.
Securities and Investment Advisory Services offered through Essex Financial Services, Inc., a Registered Investment Advisor, Member FINRA, SIPC. A subsidiary of Essex Savings Bank. The securities and insurance products offered through Essex Financial Services, Inc. are not a deposit of, or other obligation of, or guaranteed by any bank, or an affiliate of any bank, are not insured by the FDIC or any other agency of the United States, the Bank or an affiliate of the bank and involve investment risk, including the possibility of a loss of the principal amount invested.