Have you considered a living trust? – St George News
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FEATURES — Most people understand that a will is an estate management document that takes effect after a person dies.
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However, there is also a way to administer your estate and ensure your wishes are followed. A living trust is a fund set up while you are alive to help you plan your estate more efficiently and privately.
A living trust is a legal vehicle used to pass on the assets of an estate, such as property, investments, collectibles and other assets. It is sometimes chosen by people who want to help their heirs avoid a lengthy and expensive probate process or fear they may become incapacitated later in life.
A living trust provides clear instructions about dividing assets once the original owner passes away.
You can fund a trust using several sources, including:
- Cash and bank accounts
- Intellectual property, including patents, copyrights and trademarks
Formation of a living trust involves the owner of the assets, called the “grantor,” removing his or her name from ownership. Then, the assets are placed into the trust’s name. This process is known as funding the trust.
Once funding occurs, the grantor designates a trustee, charged with ensuring that all the trust provisions execute correctly. A trustee must be carefully selected and could be a relative or close associate of the grantor, or even a reputable third party such as a lawyer, banker or accountant.
Establishing a trust fund enables the grantor to leave an inheritance to their heirs, also called beneficiaries. The grantor can even place specific conditions on receiving trust items.
Living trusts come in two different versions: revocable and irrevocable. Revocable trusts tend to be the least complex and most common type. Revocable trusts offer flexibility in that they can be changed or canceled by a grantor.
Advantages of a living trust
- All living trusts offer some unique estate management advantages.
- These include:
- Increased privacy.
- Unlike wills, living trusts are not public documents. The public cannot get copies of a living trust without permission from the trustee.
- Shorter, less expensive probate. With a trust, the trustee can take care of end-of-life issues, like dealing with creditors, more efficiently. The trustee can act immediately, without the need to wait for a probate judge to decide.
The bottoms of a living trust
Before deciding to set up a trust, you should recognize that there are potential downsides.
Trusts can be costly: depending on your circumstances and your goals for a trust, it can be expensive to set up. Some people attempt to set up trusts themselves, using forms or an online platform to avoid this.
You must participate in the process. When a grantor establishes a trust, he or she has the sometimes tedious job of retitling assets. Failing to retitle assets means the trust will not perform to expectations.
Whatever you decide, always use an authorized attorney to prepare your trust. Never use an insurance agent who claims to be working with an attorney; these can be more costly and are frowned upon by the legal community.
Copyright © Lyle Boss, all rights reserved.
Lyle Boss is a member of Syndicated Columnists, a national organization committed to a fully transparent approach to money management. As an asset protection educator, he has helped thousands of seniors navigate their financial retirement options. His clients include government employees, teachers, physicians, farmers and business executives, to name a few. Boss has actively taught advanced estate planning and asset preservation for more than 20 years in such places as the University of Utah and in over 200 “Senior Retirement Consumer Education Workshops” throughout Utah, Idaho and Wyoming. Boss and his wife, Deanna, live in South Ogden and St. George, Utah.