As important as a last will would be to anyone trying to make estate plans, they need to also consider living trust. Living trust can covers three phases of one’s life: when you are alive and well, when you become mentally incapacitated and lastly after you die. Through a documented living trust, you can decide who handle you medical and financial decisions. You can also transfer your assets to a living trust. Living trust basically ease the process of transferring estate and choosing which trustee handles your financial and medical wishes. It is however worthy of note that there are revocable and irrevocable living trust. Both perform the same function, although, while the revocable trust permit changes in the term of the trust, assets placed in the irrevocable trust cannot be undone.
However, most people ask estate lawyers, how do I know whether I need a revocable living trust or just a will? This question sometimes asked from preconceived estate myths that living trust is only for certain class of wealthy individuals. Well, here are some details about a last will and living trust. This would serve as a based knowledge to the estate documents.
Reasons why you need more than just a Will.
- Mental or physical incapacity.
The living trust cater for periods in which you might be unable to handle your finances and health. When well documented, a living trust contain how you plan to take care of yourself and assets when you become mentally or physically disabled. This provision would ensure an out of the court settlement for how your assets and health should be handled while also saving you money incurred from a court supervised guardianship.
- Protecting minor beneficiaries.
For parent with minor kids, setting up a trust to hold assets and funds you would like to pass to your children is vital. It sometimes become problem when both parent of a child dies without provision for how their retirement account or life insurance should be treated. This means they didn’t name their children as the primary beneficiary of the accounts. To avoid court supervised guardianship, you should consider setting up a revocable living trust with the child named as the primary beneficiary of the retirement account.
- Owning assets in more than one state.
If you own assets in more than one state or have an estate different from where you reside, you strongly need to consider creating a living trust. Else, your estate might go through two probate process known as ancillary probate. Your family would be subjected to probate in the state you lived and also where the property is located.
Types of living trust
- Revocable and irrevocable trust.
The revocable and irrevocable living trust perform the same function but operate in a slightly different manner. The revocable living trust permit change and flexibility of the trust. You can remove particular assets or change the named beneficiary in the trust. Altogether, a revocable trust can be cancelled or dissolved. Thus, this means that the trust maker retain the power over the trust during his lifetime.
However, the irrevocable living trust cannot be undone. Once the assets has been transferred into trust it cannot be changed. This type of trust is effective in reducing excessive estate taxes. A revocable trust usually turns permanent or irrevocable upon the death of the trust maker.
- Spendthrift trust
This trust is created for minor who are yet able to able money. The trust helps to keep the assets for the named beneficiary until they are able to handle them.
- Special need trust.
A special need trust is prepared for desired beneficiaries with special need. Funds and assets are placed into this to ensure that the special needs of the individual can be met without also forfeiting their rightful government benefits.
- Life insurance trust.
Life insurance trust is an irrevocable type of trust and also a very good way to avoid excessive estate taxes. The trust collects insurances on the grantor and use it for a named beneficiary in the trust.
Contact a Fort Lauderdale Estate Planning Lawyer
Our estate lawyer are the best candidate to represent you in the establishment of your estate. If you reside in Fort Lauderdale and you need help regarding the planning of your estate, and also a personal representative, contact our estate planning lawyer in Fort Lauderdale.
Estate planning can be a tough task, depending on how you want your estate to be planned. Ever more complicated is planning it all by yourself. To ensure that your estate is well planned, it is best you contact a professional, one who is quite conversant with estate planning and the estate planning laws in Fort Lauderdale.