Estate Planning is more about gaining control of your assets while you are alive than about one’s passing. A Living Trust (an Estate Planning tool) is one way by which individuals maintain control over their assets whilst alive and also have their wishes carried out when they pass on. It is called a “Living Trust” because its takes effect during the lifetime of the individual who set it up.
Indeed, the power of a Trust is in the control. A Trust left for a beneficiary will be held and managed by a Trust organisation and the assets could then be distributed to the beneficiary in a predetermined way. The design of the Trust will ensure that other interested parties are unable to change the instruction of the creator of the Trust. With this arrangement, you are able to achieve greater control over what happens to your assets, providing greater security for the beneficiaries of the Trust. A Trust also allows you to control how the assets in the Trust are managed, ensuring that only those that you specify can stake a claim to them.
A Living Trust can be revocable or irrevocable. A Revocable Trust can be revoked or amended, but an Irrevocable Trust cannot be changed once it is executed. The assets placed into a properly drafted Irrevocable Trust are permanently removed from the Estate of the individual. They are therefore not considered part of the Estate and will not be subject to estate taxes in the event of the creator’s demise.
In addition to estate tax savings, a Living Trust can offer you tremendous flexibility and efficiency. It can hold the money for your minor children until they are responsible enough to manage the money themselves. If you cannot trust your children or any other beneficiary with the responsibility of managing your assets after your demise, the Trust can address this concern. The trustee can do so by holding the assets in trust for the Settlor’s lifetime and only distribute it to the beneficiary as stated in the Trust.
Placing your assets in the Trust during your lifetime instead of a Will also helps you avoid probate. A Will that is probated as well as other information relating to the assets listed in the Will becomes public record when you pass on. In contrast, a Living Trust is a private document and the assets listed in it will not be exposed to the general public.
The added benefit of a Living Trust is its usefulness during your lifetime in the event that you become incapacitated. You can arrange for a Trustee to manage the Trust assets on your behalf in the event that you are unable to make decisions for yourself.
Does a Living Trust sound like a good fit for you to gain control of your assets while preparing to gift these assets to a beneficiary? If so, consider reaching out to FBNQuest Trustees. We can help you create a Living Trust agreement that outlines how the Trust assets are to be managed and distributed. Our team will also walk you through the process of transferring assets to the Trust. The process may take less time than you think.
