Do You Need A Living Trust For Your Estate Plan? Some Points To Consider |
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| By: James Vignione | ||||
Part of any sound estate plan should be ensuring that your heirs face as few problems as possible, and occasionally a living trust can help carry out this goal. Using a living trust as part of an estate plan makes sense for many seniors, and it is important for anyone planning an estate to look at what living trusts have to offer. One reason to consider a living trust is the protection it can provide should unforeseen circumstances strike. A living trust can protect you and your estate if you become incompetent through an illness or accident. Without a living trust your assets could be at risk. If you are incapacitated, the responsibility for the living trust can be passed to the backup trustee named when the living trust was set up. This helps to protect your assets while ensuring those assets are used only for your care. Transferring assets to a living trust also protects them from probate court. Some people who have made out a will assume that their assets will not have to go through probate, but this is not the case. Whether you have a will or not your assets will need to go through probate, a sometimes expensive and time-consuming process for your heirs. Living trusts also offer much flexibility, and the documents used to create the living trust can dictate how the assets will be handled on your death. The trustee will be free to carry out your wishes without the need for an expensive and lengthy probate process. Setting up a living trust is also a good way to protect your intended heirs in the event of divorce, lawsuits or other major life events. If the intended heirs are going through a divorce, an ex-husband or wife could end up with much of the money intended for a son or daughter. With a living trust this unpleasant scenario can be avoided. The same holds true if the heirs are involved in a lawsuit. The money in the living trust can be protected from judgments, protecting both your heirs and the money you have worked so hard for. It is important to make sure the living trust includes specific language that will provide this protection for your heirs. And it is important to list and define these possible scenarios when the documents are being drafted. A living trust can also be used for tax planning. Also, seniors whose estate exceeds the current tax-free limits should explore these possibilities as well. Many people avoid setting up a living trust because they fear the cost will be prohibitive, especially for small estates. In fact the cost of setting up a living trust can be reasonable for all but the tiniest estates. While fees will vary, the typical fee for setting up a living trust ranges from several hundred to several thousand dollars. The cost will be affected by several reasons such as the complexity of the living trust and the nature of the assets to be protected, but for most people a living trust is a worthwhile investment. |
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| Article Source: http://yourfinance.co.za | ||||
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