A LIVING TRUST PRIMER
Having a trusted professional who is familiar with the rules and regulations that govern trusts is essential. Due to the complexities involved, we recommend setting up an appointment with FSG to evaluate how a living trust may benefit your estate plans.
What Is A Living Trust?
A living trust is a vehicle created while you are alive and is funded with any assets you choose to place in it. You have full power over these assets, including where they go once you die. In the case of a revocable living trust, you may make any changes, including the terms, trustee, and beneficiaries at any time, along with complete termination of the trust.
Why Should I Create A Living Trust?
Living trusts are created to be vehicles for assets that pass over the probate process. It also allows you to create a safety mechanism for yourself in the case that you become physically or mentally disabled. It is straightforward to create and make changes to, making it a simple tool to meet many of your estate planning goals. A living trust also will allow for fewer challenges when assets are being transferred, as compared to a will.
Drawbacks of Living Trusts
As useful as a living trust is, it is worth noting that there are some things they cannot do. Particularly, you may not create a living trust to protect your assets from creditors, or to protect Medicaid status. There is a fee to set up a living trust, and not all assets are easily transferred. They also should not be used to avoid any tax penalties.