As you prepare your will and other aspects of your estate planning, it’s also a good idea to consider a living trust. The two most common components of estate planning are your will, which will detail what you want to happen to your assets after you are gone, and your advance health care directive, which will detail what life-saving measures you do and don’t want to be performed. Beyond those two, living trusts can also be a great idea.
What Is a Living Trust?
A living trust is a legal document where you name a trustee or designated and trusted individual and grant them responsibility for managing your assets. One of the primary benefits of a living trust is that it will allow for a much smoother transfer and distribution of your assets after you are gone and allow the time-consuming and costly process of probate to be avoided. A living trust will allow you to appoint a trustee to have legal possession of all of the property and assets contained within the trust.
How Does a Living Trust Work?
The trustee that you name for your living trust will have a legal duty to manage the trust in the best interests of the beneficiaries of the trust. Trustees have a fiduciary duty, which means that they are bound to always act in the best interests of the beneficiary or beneficiary above their own. If you pass away, the assets contained in the trust can be distributed to the beneficiaries. However, unlike a traditional will, living trusts do not have to pass through probate and the court system in order to be distributed. This dramatically accelerates the process and