A living trust is a legal document that is similar in many ways to a will. The major difference between the two is that a will become effective at the time of your death whereas the living trust bypasses the process of probate so that your wishes for your estate will be carried out according to your instructions in the event of your death or if you become unable to manage your finances due to being incapacitated. The living trust is designed by an estate planning attorney to reflect your wishes for your assets, dependents and heirs to your estate.
Living trusts are not right for everyone. Only individuals who have substantial assets or who have complex personal or financial circumstances typically use a living trust instead of a traditional will. Some situations, such as owning properties in other states than where you live, having a blended family or other complicated situations can be difficult to manage through a will. Basically, if your wishes cannot be fulfilled through the designation of beneficiaries, the rights of survivorship titling option and through a power of attorney, a living trust is a good choice. Hiring a qualified estate planning attorney to draft a living trust will ensure your desires for your assets are carried out according to your plan. Here is a Phoenix based website with lots of helpful resources – Phoenix Estate Planning Attorney.
Two Types of Living Trust
There are two types of living trust that the estate planning attorney can draw up for you. With a revocable living trust, your assets will be placed into the ownership of the trust. As trustee, you keep control of the assets with the option to change or revoke the trust whenever you want. When you die, the assets will go directly to the beneficiaries, avoiding a lengthy probate period.
With an irrevocable living trust, you will give your assets away permanently while you are alive and the decision is irrevocable. They are not a part of your estate once they are relinquished. Unless you have an excessive amount of money or property, an irrevocable living trust should not be considered an option. Your estate planning attorney should be able to advise you on whether your circumstances make a living trust an appropriate choice for your estate and which type is best. With the revocable living trust, estate taxes will apply. With the irrevocable living trust, the assets are no longer a part of your estate and, therefore, are not subject to estate taxes.
While some people prefer to go online or use software to create their own living trust in order to maintain their privacy, hiring an estate planning attorney with experience and a good track record is the best way to ensure your assets are distributed according to the conditions you want. There are a number of legal documents that are required when completing a legal trust that only a qualified attorney who specializes in estate planning will have the expertise to complete according to the laws and to your wishes.