Many individuals do not like thinking about planning for their death; admittedly, it is a difficult subject to deal with. However, estate planning lawyers highly recommend that everyone create an Estate Plan which includes a Last Will and Testament as well as a Living Trust if necessary. There two legal documents are different and each is beneficial in its own way. To fully appreciate the value that a Living Trust can provide, it is important to discuss these arrangements with estate planning attorneys who can provide experienced estate law administration and appropriately advise clients on the important benefits of a Living Trust.
The Difference Between A Living Trust and A Will
Although both documents are declarations of property which provide a distribution scheme of an individual’s property after their death, estate planning lawyers say there are significant differences between a Will and a Living Trust. A Will allows the transfer of property to others, with certain limitations, and it usually must go through the probate process. A Living Trust functions differently, is modifiable, and can help avoid probate.
Estate planning attorneys advise that a Living Trust should go into effect as soon as it is made, whereas a Will does not take effect until after the death of the estate owner and after a determination regarding probate of the Will is made. A Will is considered the necessity in estate planning, whereas a Living Trust is effectuated in the even more in depth when control and protection of a person’s property is needed.
Living Trusts – An Important Part of Estate Planning
Lawyers who are experienced in estate law administration confirm that a Living Trust can be more detailed and time-intensive to establish; however, it can provide the following important benefits, based on the amount of property owned and details of the Trust:
Privacy – A Living Trust is a private arrangement; it is not part of any public record, as is a Will. It can be drawn up with the assistance of an experienced estate lawyer, who can help a property owner keep their estate private and protected at all times.
Avoid Probate – Because a Living Trust has trustees as named co-owners of a property, a co-owner will will receive full ownership of that property upon the death of the other owner of the Trust, avoiding the need for probate or court involvement.
Retain Tax and Other Benefits – In some states, where certain property qualifies for certain tax exemptions, estate attorneys say these exemptions can be lost when property is transferred to a new owner. A Living Trust prevents the loss of these benefits, since property is technically not changing to a new owner. Rather than that, it is staying with a surviving owner.
Interpretation Consistency – Since a Living Trust is very specific, there is less chance for any discrepancy in interpretation, even when it involves persons and property in multiple states. A Will is usually either subject to the laws of the state where the deceased individual lived, or the laws of the state where property is located. At times, this can cause confusion and prolong the distribution of property to beneficiaries. A Living Trust avoids this type of property transfer problem.
IRA and Retirement Benefits – Retirement planning is already a complex item to handle. When an account holder dies, retirement funds may be subject to taxation unless otherwise protected by a Living Trust. With a Living Trust, the trustee may be able to accept these funds as a rollover into their own IRA accounts.
These are only a few of the benefits and protection that can be gained with a Living Trust. When planned with the assistance of estate planning attorneys who are experienced in estate law administration, a property owner can feel confident their estate will be disbursed as desired upon their passing. While there are some areas where a Will can provide the best protection, such as naming a guardian for surviving minor children, a person planning their estate should still discuss a Living Trust with experienced estate planning lawyers, and learn how this important legal document can benefit them!
Watson Law Firm
1450 Copperfield Parkway, Suite 300
College Station TX 77845
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