People come to estate planning with different goals, different estate problems, and different family circumstances. Some people have very simple estates that require very simple estate planning while others need advanced planning. Trusts are a common estate planning tool. If you are unsure how a living trust might help you, read on to learn eight reasons to use a living trust. #1: Asset Protection Provided By Living Trust A living trust will not protect the grantor’s assets from judgments and creditors. However, your living trust can protect assets for your beneficiaries. For example, you could establish an asset protection trust for your children and name that trust as a beneficiary of your living trust. After your death, the asset protection trust is funded. #2: Spendthrift and Discretionary Provisions The terms of a trust may actually help safeguard trust assets from financially reckless heirs. A spendthrift provision prevents a beneficiary from assigning away their inheritance. A discretionary provision allows the trustee to make distributions at his or her discretion or to pay a beneficiary’s bills instead of making a direct distribution to the beneficiary. #3: Some Tax Relief Trusts set up through a Will are called testamentary trusts. Living trusts are established while the grantor is still alive. The grantor of the trust will still be responsible for taxes on the trust. However, beneficiaries of living trusts generally do not pay taxes on their distributions of principal. Also, married couples may be able to reduce potential federal estate taxes using a revocable living trust. #4: Incapacity Planning When a grantor establishes and funds a trust, they may serve as the trustee. However, the grantor typically names a successor trustee. If the grantor becomes incapacitated, the successor trustee takes over. Assets within the trust continue to be managed. However, a revocable living trust may not help with qualifying for government programs like Medicaid. #5: Probate Avoidance Assets used to fund a trust generally pass to the beneficiaries without going through probate. Living trusts are only one way to avoid probate, however. #6: Avoiding a Will Contest Passing assets to your heirs through a living trust instead of a Will can greatly reduce the potential for a Will contest. #7: A Living Trust Organizes All Assets in One Place During your lifetime, it may be easier to manage your assets if they are trust assets. After your death, the trustee or successor trustee of your living trust will spend less time gathering your assets if they are all part of your trust. #8: Privacy Trust documents generally are not released to the public, unlike a Will. Someone may be able to obtain a copy of your Will from the county clerk after you die. The same cannot be said for your trust. A Living Trust Is Only One Estate Planning Tool. Located in Palm City, the Law Offices of John Mangan, P.A. also serves clients in Stuart, Hobe Sound, Jupiter, and Port St. Lucie. Law Offices of John Mangan, PAPalm City – Stuart, FLCALL: 1 (772) 218-0480 Do you question the need for attorney guidance with so many online resources? Because laws and regulations are complex, and because every person has a lot at risk, more people than ever are seeking professional guidance from an experienced, knowledgeable source. That helps explain the rapid growth of our firm. Whether you happened upon this website by accident or are one of the many referrals we receive from a nearly 15-year collection of satisfied clients, our staff can provide customized estate planning guidance for you. Call us. Our number: 1 (772) 218-0480 Written by: John Mangan, JD, MBA
