An estate plan comes with several important tools, each designed to ensure that your wishes are honored when you are no longer around to make important decisions. One such tool is the living trust.
At the very basic, a living trust is a fiduciary document that allows you to distribute your wealth to loved ones upon passing on. A living trust is created by the grantor or settlor and managed by the trustee. There are several benefits that come with including a living trust in your estate plan. Here are some of them:
Avoid the probate process
When you die, your estate will go through probate. If you had an estate plan, the probate court will validate your will and distribute assets based on the wishes articulated in the will document. On the other hand, if you die intestate, Texas law will define how your estate is distributed. Here are three benefits that come with using a living trust to avoid probate:
- Probate can be quite costly – Before your assets can be fully distributed to beneficiaries, it has to be certified by the probate court. This involves money in the forms of legal costs, inventory fees and applicable taxes.
- Probate takes time – Subject to the court calendar, the probate process can take months to complete. This time frame can get even more prolonged if someone is contesting the will.
- Probate is public – Probate is a public process. This means that anyone can access the court records and see what you owned, your debts as well as how you have distributed them.
You maintain control of your assets even after death
A living trust is governed by the trust instrument. Thus, you can dictate how you wish to have your assets released to your beneficiaries through the trust instrument. For instance, you can use a living trust to ensure that your beneficiary uses their inheritance prudently by defining how and when they will access their inheritance.
An estate plan that comes with a living trust is an effective way of realizing your goals both in life and death. Find out how you can create a living trust that addresses your estate planning goals.