As you create or revise your estate plan, you will want to make sure your wealth remains intact once it passes on. You may have concerns, then, that putting your assets in a will could devalue your estate. While wills have their place and purpose – especially in establishing a testamentary trust – there can be benefits to having property distributed outside the scope of the probate process. By setting up a living trust, you can ensure your beneficiaries will avoid the costly fees associated with the process.
How living trusts work
A living trust – also called a revocable trust – is an estate planning document that you can amend or revoke during your lifetime. When setting up your trust, you will retitle your assets in its name. Thus, the trust owns them, rather than you. Yet, the living trust arrangement allows you to appoint yourself as trustee, which means you can manage these assets while you are alive. You can also appoint yourself as your trust’s beneficiary, allowing you to access and use the trust’s assets and any income they generate.
In creating your trust, you will also need to name a successor trustee. This individual will manage your trust once you pass or if you become incapacitated. And you will need to name successor beneficiaries as well, who will receive your assets after you die.
What living trusts offer
Because your living trust is a separate legal entity from you, it will continue existing after your death. Since only property registered in your name must go through probate, the assets in your trust will avoid it. Furthermore, trusts offer greater privacy than wills. After wills pass through probate, they become public record, and anyone who wants to access them can. If you don’t want information about your assets or details about disbursement to be discoverable, they will remain private with a living trust.
A living trust can be a worthwhile alternative or companion to a will. If you create one, you will want to have a Texas estate planning attorney review it, so they can make sure it is sound and reflects your current circumstances.