What is a Living Trust?
The primary purpose of a living trust, also known as a revocable trust, is to transfer assets from one person to another. It is a third-party fiduciary agreement that can hold different types of assets, including investments, real estate, vehicles, personal possessions, and more. It goes into effect immediately upon transferring assets into it.
A living trust allows you more control over your assets while alive and when you’re gone. You can assign a trustee, a person who manages the trust, to distribute any remaining money, property, or help to your beneficiaries when you’re gone.
Many people choose a trust as it protects your beneficiaries from the probate court, ensures privacy outside the legal system, offers flexibility, saves money, protects your property, and allows for greater control of your assets.
As part of the estate planning process, our experienced attorneys can walk you through wills, trusts, guardianships, power of attorneys, and other critical legal documents that will offer the ultimate protection.
Are There Any Downsides to a Living Trust?
There are more upsides to a trust than drawbacks, though, like anything else, it’s essential to understand both the positives and sticking points. The potential downsides to a trust include:
- The setup is slightly more complex and costly
- Additional paperwork
- Additional legal fees
- Possible challenges in refinancing trust property
- Transfer taxes
- Administration fees
- Lack of protection from creditors
As cost can be an issue for individuals considering a trust, fees related to a trust range between one to two percent, which covers the trust’s investment manager, fiduciary, trust administration, record-keeping, and disbursements.
When considering a living trust, an estate planning attorney with Fuller Law Practice can more closely examine your estate and outline potential short- and long-term costs to give you a better idea of your investment. Trusts offer the most protection—and a private platform—to ensure your assets go to the right people and provides your family avoids probate court, which can be a costly legal battle.
How Does a Will Compare with a Trust?
The first legal document that often comes to mind related to end-of-life planning is a will. Wills and trusts overlap, though there are differences between the two.
A will is a simple document that outlines what you want to happen after you pass away. This could include final wishes, funeral arrangements, specifics of your affairs, how you want assets distributed, and guardianship designations for minor children.
Wills are somewhat limited. They only go into effect after you die and don’t always control how your assets are distributed. This is especially true if your will is not legally valid or explicit, as every will must go through the probate process first—except for small estates—to be authenticated.
On the other hand, trust is a popular choice for people who want a private arrangement outside of court to ensure their assets are distributed to the right people. Trusts offer more flexibility, safely hold various assets, and offer greater overall control.
When paired together, they are a solid combination to ensure your end-of-life wishes are carried out your way. From wills to trusts, count on Fuller Law Practice to give you the full spectrum of estate planning advice and knowledge when choosing the best legal tools to protect your assets.
What Assets Go into a Living Trust?
In order for a living trust to be “active,” you must set up beneficiary designations and transfer assets to the trust. Not all purchases make sense for a trust, which our attorneys can provide clarity on during the estate planning and trust setup process.
Assets that should go into a living trust include:
- Real estate
- Financial accounts, including savings and investment accounts, bonds, stocks, safe deposit boxes, money markets, and mutual funds
- Medical savings accounts
- Life insurance policies
Retirement accounts, IRAs, and annuities do not make sense for a living trust, as transferring funds will be considered a withdrawal. You could face financial penalties for this. Before making any asset recommendations, our attorneys will review the types of trusts with you, their tax advantages, and other benefits or drawbacks.
We will provide informed and practical guidance on planning your estate and setting up a living trust that meets your needs and goals. You can make a list of your current assets as a start and set up an initial consultation with our attorneys to get valuable legal advice in setting up a trust. Contact us or call: (702) 553-3266.
Can an Attorney Help Me Set Up a Trust?
At Fuller Law Practice, we pride ourselves on offering turnkey estate planning services that start with transparent and valuable planning and assistance with important decisions that will impact the success of your estate plan. This includes creating a trust you and your family can rely on for years.
Our services or involvement don’t stop once you hire us—we want to help guide every step so that you’re confident in your choices from the start.
To better understand trusts is to get to know the different types, from living to testamentary to revocable and irrevocable. We will help you determine the best approach to avoid probate, prevent tax issues, protect your assets from creditors, maintain your privacy, and ensure flexibility and control over your assets.
From consultation to filing paperwork to helping you set up and manage your trust, trusts are diverse, versatile, and slightly more complex than wills and other estate planning tools. Our attorneys will help you reach your goals and prepare with valuable legal advice, counsel, and support.
Consider Fuller Law Practice for your trust and estate planning needs. Get started with an initial consultation to discuss your legal options today: (702) 553-3266.