You may be under the impression that you should use a last will as your primary estate planning tool if you do not consider yourself to be enormously wealthy with a very complex estate. It can be natural to assume that a living trust is just a glorified type of last will that is really not going to provide much of a difference.
In reality, there are some very tangible reasons why someone could suggest that a living trust is better than a last will. Let’s look at some of the advantages that you gain with a living trust.
Spendthrift Protections
With a living trust, you can protect a spendthrift beneficiary. You do not have to allow for lump sum distributions of all the property that is held by the trust. To prolong the viability of the trust, you could instruct the trustee to distribute limited assets on a monthly basis over an extended period of time.
On the other hand, with a simple last will, the executor normally would be handing out lump sum inheritances to the heirs.
Avoidance of Probate
Probate is the legal process of estate administration. If you were to use a will to state your final wishes, it would be admitted to probate after your passing. The Surrogate’s Court would supervise the administration of the estate, and this process will take nine months to a year, even if there are no complications.
The heirs cannot receive their inheritances while the estate is stalled in probate, and probate costs can reduce the value of the estate before it is distributed among the inheritors.
Property that is held in a living trust could be distributed outside of probate, and this is another benefit.
Incapacity Planning
Many elders become unable to handle their own affairs at some point in time. There are numerous different causes of incapacity, but Alzheimer’s disease is a threat that everyone should take seriously. This disease strikes almost half of people who are at least 85 according to the Alzheimer’s Association.
If you do nothing to prepare for incapacity, the state could ultimately appoint a conservator to handle your affairs.
When you have a living trust, you can name a disability trustee in the trust declaration. In the event of your incapacitation, the hand-picked trustee would be empowered to handle the trust administration tasks.
Learn More About Living Trusts
We have looked at a handful of the reasons why a living trust could be a better choice than a last will for many people. If we have piqued your interest, you may want to obtain more detailed information about the value of living trusts.
Our firm has prepared an in-depth special report on living trusts, and you can access your copy free of charge. To obtain your copy of the report, simply click this link: Free Report on Living Trusts.
- Estate Planning for Small Business Owners - March 25, 2023
- The Consequences of Not Having an Estate Plan - March 23, 2023
- Estate Planning for Same-Sex Couples: Key Considerations - March 21, 2023
Leave a Reply
You must be logged in to post a comment.