An estate plan helps ensure a smooth transfer of assets to your beneficiaries after your passing. As you build your estate plan, consider how a living trust could help you meet your asset protection needs.
Understanding the benefits and drawbacks of a living trust can help you decide if you should establish one as part of your estate plan.
Benefits of a living trust
Establishing a living trust has a number of benefits. The assets placed in the trust become possessions of the trust itself, not your estate. That means that those assets stay secure and go to the intended beneficiaries without the complications of probate.
Living trusts also provide a seamless transition of control for your assets. If you become incapacitated, your appointed trustee can manage the trust without the need for legal intervention and permission. You also get the benefit of privacy with a living trust. Estates in probate become public records, but living trusts have more security. The assets and records for living trusts stay private, allowing you to keep your estate details confidential.
Cons of a living trust
While a living trust is beneficial for many situations, it does require ongoing management to keep the assets up to date. In addition, opting for a living trust also means that you will not have the same level of oversight as you get with probate administration. This could lead to potential disputes or mismanagement if your trustee fails to carry out your wishes.
According to reports on CNBC, only 33% of Americans have an estate plan. Protect your family from unnecessary probate delays with a comprehensive estate plan and a living trust.