Living Trust FAQ
What is a Living Trust?
Living Trusts are legal arrangements in which the trustee holds a property that will one day be distributed to a benefactor. They are often used in order for the trustee to pass down property upon their death to the benefactor while avoiding many of the legal issues surrounding probate law. They are known as “Living Trusts” because they are created before the trustee passes, not upon the event of their passing, as many trusts are.
Living Trusts are powerful tools to use in dealing with estate planning laws, as they can help reduce the tax burden applied to the estate in the event of the owner’s death, as well as provide for more control over the estate while the trustee is still living.
Why would someone need a Living Trust?
Because of the legal issues that often arise in estate planning, a Living Trust can be an effective tool for separating certain assets from the trustee’s formal estate, usually with the intent of passing on the property held by the Living Trust to the benefactor. Living Trusts can also be used to prepare for the financial future of a benefactor who is disabled either mentally or physically and ensure that they are taken care of even after the trustee has passed on.
What is probate and what does it have to do with Living Trusts?
The probate process is the legal process through which the court system distributes the deceased’s property and holdings. Because property that is held in a trust is technically not part of this estate, it is possible to avoid those probate problems through the use of Living Trusts, thus giving the trustee more control over who stands to benefit from their estate upon their passing. Once the process has taken place, the Living Trust will simply cease to exist. In other words, a Living Trust is a way to direct one’s property outside of probate and more directly control “who gets what,” so to speak.
If a Living Trust gives me control, do I still need a Will?
Yes, because a Living Trust only applies to the property that is being held by the Living Trust. Everything else can still be handled by a will. Furthermore, the use of a will can give you control which leads to you not having to create a Living Trust – the end result is that, by using both, you have much more say over what happens to your property after you pass on.
Some people believe that by using the Living Trust that they are manipulating the “system” enough to not worry about what happens to the rest of their estate. But if you really want to use the law to your advantage, you’ll use all of the tools at your disposal – including that of a will.
Isn’t setting up a Living Trust a hassle?
Like just about any other legal endeavor, setting up a Living Trust will require that you fill out some paperwork. But as the practice of creating Living Trusts has become more common, it’s actually easier than you think, for example, to transfer ownership of your property to a Living Trust that you then control as the trust’s trustee. You’d be surprised at how intuitive the process can be as soon as you’ve decided that using a Living Trust is the right option for you.
Are there any other helpful protections I get from a Living Trust?
If you’re thinking about protection from creditors, the sad news is that no, you can’t protect your property from creditors simply by transferring it to a trust. Otherwise everybody would be setting up Living Trusts as a way to get out of debt! The good news, however, is that the protections you still get from creating Living Trusts are definitely worth the effort.
However, there may be a certain type of protection you’ll want to be aware of, and that is that Living Trusts are not subject to probate, which may mean that creditors have less leeway when it comes to trusts that are being transferred.
How much does it cost to create a Living Trust?
Costs vary based on who is charging you, and for what. Some lawyers will provide the paperwork but will also charge you for the time they help you set up the Living Trust. Other people take the paperwork into their own hands and find the only costs they need to accrue are the costs of acquiring the proper paperwork in their state. Ideally, you’ll want to reduce the cost of your Living Trust, but that doesn’t mean you should go into the interaction without knowing what you’re doing.
When is a Living Trust enforceable?
Once the trust is established, it is enforceable; it does not suddenly become a trust upon your death. Otherwise it would simply be called a trust. Living Trusts are there for you while you’re living – hence the name – and will be enforceable once they’re properly arranged and set up.
What are the requirements for a Living Trust to be valid?
For a Living Trust to be valid, it should meet all the requirements that are established in the paperwork. This might vary from state to state, so be sure that you’re using a Living Trust form that best works in your state. It’s also important to note that your Living Trust should have valid trustees and beneficiaries, though this is often not a challenge if you know what your plans are ahead of time.
When is a Living Trust effective?
It is effective from the moment it is set up (see the question “When is a Living Trust enforceable?”) until the trustee has passed on and the property has been distributed to the beneficiaries, at which point the Living Trust is no longer in existence and, therefore, no longer considered effective. The Living Trust will remain effective for as long as the trustee lives, of course, which means the effectiveness timeline is flexible.
Articles For Living Trusts
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Living Trusts You Can Set Up This Week
For many people, the concept of estate planning is very difficult. Either they know it will be too emotionally heavy for them (and this is a common problem, believe it or not), or they believe the problem will be too technically daunting and forgo the process altogether. But when it comes to key legal documents, it’s hard not to consider many of the estate planning documents you’ll sign in your lifetime – wills, living wills, and, of course, trusts.
The living trust itself is a concept that vexes a great number of people. The idea, once explained, is much simpler. Essentially, a living trust is a trust fund that can be created while the person creating it is still alive. (For your further information, a trust is essentially a way of avoiding probate law; putting your money into a legal entity so that it’s protected when you pass on).
Setting up a living trust might sound like a major hassle. And in some cases, it really can be. But you’d be surprised at just how easy it can be to set up a living trust, especially when you’re working with the raw expertise and vast resources of a site like FindLegalForms.com – not that we like to toot our own horn too much. Here’s some more information on setting up living trusts this very week.
First Things First
Do you want to set up a living trust? The most important part of setting it up is actually not the legal work – that can be done in a jiffy – but in the actual thought that goes behind the living trust. You want to make sure that you’re making the right decision and that you’re making the living trust for the right reason. Of course, living trusts are often straightforward enough that this is not a major concern for everybody. Even so, it’s something to be mindful of.
Once you’re sure you want to establish a living trust for the benefit of the beneficiary you choose to name, you’ll want to move on to the next step: you can either file for the living trust yourself or consult with an estate planning lawyer.
When it comes to this part, a lot of websites might give you conflicting advice. Some will say that you should always consult a lawyer; others will say that you simply need to download and file the forms yourself. We won’t tell you what to do – that’s your decision to make –but the most important part of the process is being sure you understand what you’re getting into. At least consulting with a lawyer first is usually advisable.
Setting up a Living Trust This Week
While setting up a living trust this week might sound like we’re putting you in a major hurry, consider this: many living trusts are not very difficult to handle at all. The legal infrastructure might have a lot of paperwork, but it’s nothing that hasn’t been done before. Again, we want to emphasis that you shouldn’t hurry to form this kind of trust without forethought; but you certainly shouldn’t put it off, either.
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What is a Living Trust and How Can It Help You?
When many people think about estate management, they make the mistake of thinking too little about estate management. Now what does that mean? Quite simply, some people don’t put the thought and effort into handling their estate and taking care of their loved ones even after they’ve passed on. As difficult as it might sound, the process of estate management can be rather intuitive once you understand how it works. And when you understand strategies like a living trust, you see just how much you can benefit from proper estate management.
Why single out the living trust? Simple: because it’s one of the best ways to handle your property and pass it down after you’re gone. You see, when you pass on, much of your estate will go through a probate court, as they help decide where and how your assets will be allocated. That’s not what you want, because having a court decide these things leaves the process open to family contests and legal squabbles.
A living trust skirts all that by essentially being an independent piece of property - because the trust itself technically owns the property placed in the trust and you’re simply running the trust, that property does not get included in probate when you pass on. This means the trust can simply change leadership to the person you outlined before you passed on - this will be the person you intended to receive the property in the first place.
For many people, especially those new to estate law, this will seem like an unnecessary step. Why go through all of the trouble of creating a trust if you can just leave your property to someone? The name of the game in estate planning is two-fold: avoiding estate taxes and avoiding probate. Estate taxes are taxes levied on the estate simply because you passed on - it doesn’t seem very fair, but that’s the law we have to deal with. Probate is the process that helps make sure these taxes get paid. In other words, creating a living trust gives you more control over your property by actually giving the property over to the trust.
This step wouldn’t be necessary if there were no estate taxes and no probate laws to deal with. But because that’s the way our laws are constructed, there are a few legal options to skirt these rules and maintain more control over your own estate. By dealing with reality and understanding what a living trust can do for you, you give yourself the power to really hold more control over your estate not only while you’re living, but after you’ve passed on. For people with a lot of property to manage, this is a very intriguing option indeed.
Is a living trust for you? It will depend on a couple of things: how much property you have and what you want done with that property after you pass on. Consult with an estate lawyer to find out exactly what is the best option for your individual situation.
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Living Trusts
A living trust or revocable trust is a legal document that is used to pass on your assets to your beneficiaries upon your death. Thus, it accomplishes much the same results as a will. Like a will, it is revocable at any time during your life. Also, like a will, it allows you to retain control over your assets during your life and affords no direct tax advantages. However, it does have a few advantages over a will and a few disadvantages, as well.
The main advantage to using a living trust instead of a will is that it allows your assets to be passed to your beneficiaries automatically upon your death, without any delay, probate, court intervention, or lawyer’s fees. To many people, this very important advantage outweighs any disadvantages. Another advantage is that it is much more difficult to challenge a living trust in court than it is to challenge a will. Finally, a living trust is a more private document that only needs to be recorded with the county recorder in the event that real estate is transferred with such a trust.
Perhaps the most important disadvantage of using a living trust is the need to actually transfer to the trust all of the property intended to be put in trust. This requirement and the need to keep accurate trust records make the actual mechanics of a living trust more complicated than simply preparing a will.
These Living Trusts Kits have been prepared by experienced attorneys to provide you the step by step guidelines and model forms to tailor a living trust to your unique situation, in compliance with governing laws. They include living trust related forms, for single and married persons, with or without children, as well as forms to amend or revoke an existing living trust.
Popular Prepared by our experienced attorneys, this Living Trust Forms Combo Package contains the array of forms you need to lawfully create your own Living Trust. Don't reinvent the wheel or spend all your time learning applicable laws. Take advantage of our attorney's expertise and download this combo package today.
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Charitable Trust Agreement whose sole purpose is to support charitable works. This attorney-prepared agreement sets out the duties of the trustors and any... View More
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These attorney-prepared Living Trust Amendments Kits are specifically designed to allow you to lawfully amend your living trust, ensuring that the trust remains valid.... View More
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Popular - Living Trusts kits for single person or individual spouse.These kits take the guesswork and complexity out of drafting a trust, and have been expertly... View More
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Living Trust Revocations specifically designed to allow you to revoke a living trust for a married couple or single person. These forms contain the provisions which... View More
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Popular - Living Trusts kits for married couples. Specifically prepared by experienced attorneys to take the guesswork and stress out of drafting your living trust,... View More
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Drafting a solid and lawful Living Trust may be one of the most important things you ever do. Benefit from the legal expertise of our attorneys when you download... View More
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These Revocable Living Trust Kits for Single Persons or Individual Spouse have been expertly drafted by attorneys to provide you with what you will need to tailor your... View More
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