When most people wonder, “Why do I need a trust?” they are typically referring to a revocable living trust. Revocable Living Trusts are used as centerpieces in estate plans and are appropriate for most people.
Should I have a trust now?
Yes, consult with a qualified, experienced estate planning attorney to set up a trust now. Your revocable living trust covers three possible time periods:
- While you are alive and well
- While you are alive, but disabled
- After your death
What does “disability” mean in this context?
In estate planning, the term, “disability,” refers to the inability to manage your property and day to day affairs. It’s a mental disability and can be for a period of time or permanent. It does not mean that you pull a back muscle trying to be a weekend warrior and are laid up on the couch.
Who’s in control of my assets if I have a trust?
- While you are alive and well, you remain in control of your assets; you make all financial decisions and pay your bills just as you always have. You even file your taxes in the same manner.
- During any time of disability, your “disability trustees” named in your trust will pay your bills, manage your assets, and ensure that your needs are met. In most cases, your disability trustee should also be named as an agent under your power of attorney to manage any assets not funded into the trust (e.g., tax-deferred retirement accounts).
- After your death, your “disability trustees” aka “settlement trustees” named in your trust will wind down your financial life, settling your trust.
What are some trust benefits?
Benefits of a well constructed, comprehensive trust-based estate plan include:
- Organization and management of assets
- Disability planning
- Potential tax savings
- Asset protection for your beneficiaries
- Remarriage protection
- Probate avoidance
Please be aware that not all trusts are created equal. Bargain basement living trusts available on CDs, the internet and from nonlawyers are often defective and put your loved ones and you at risk.
If you have questions about why you should have a revocable living trust, consult with a qualified and experienced estate planning attorney.
Latest posts by Timothy P. Murphy (see all)
- Is It Hard to Contest a Will? - January 15, 2019
- What Are the Rules of Intestacy in California? - January 13, 2019
- Estate Planning for Adult Children Suffering from Alcoholism - January 11, 2019