Upon your death, someone else will take possession of everything you have. How your beneficiaries gain access to your possessions depends on what type of estate planning you do before your death. One of the most effective ways to take control of your estate planning process is to set up a living trust. With a living trust, you can realize some benefits that are unavailable with other similar tools.
What is a Living Trust?
A living trust is a type of legal entity that you can establish to hold your property and possessions. You can place many different types of property into the trust so that, upon your death, the property goes to the beneficiaries that you designate. While you are still alive, you can keep using the assets and property that you put into the trust. The only difference is that, after creation of the trust, the property is legally no longer owned by you but by the trust.
One of the major reasons that you may want to consider setting up a living trust is so that your assets can bypass probate when you die. The assets that you have will go directly to the beneficiary of your choice without having to go through the probate process. By comparison, when you have only a will, all of your assets will go into the probate system before they can be distributed to the appropriate person.
Overseeing Your Affairs
Another advantage of setting up a living trust is that it can allow you appoint someone to oversee your affairs. The trustee that you appoint can oversee all of your affairs as soon as you pass away or even if you become unable to do so. For example, if you suffer from medical problems and you do not have normal mental capacity, your trustee can take over for you. This can be beneficial as you get older and it can ensure that your estate is taken care of properly.
The living trust can also provide you with the advantage of keeping your affairs private. When you die with only a will, your assets go through the probate system and become a part of public record. Everyone can see what was transferred to your beneficiaries. By setting up the living trust, you can keep everything private. Another potential advantage is that it could save your estate money. When your estate goes through probate, it can be a long and drawn out process. It could even lead to legal disputes among your beneficiaries. The living trust is much more simple and can help your family avoid legal costs.