When looking at legal documents regarding distribution of property and your assets after death, you will find a last will and testament and a living trust. These two documents are not the same, although they both deal with the distribution of your property after your death. Deciding which one is best for your estate can be tricky, and it’s important that you understand the differences between the two.
If you are not familiar with legal terms and if you haven’t seriously thought about your will and other, similar documents, you may not know what a living trust is. A living trust is a binding legal document that you create while still alive for one of two reasons: to avoid probate, or to save money when it comes to taxes. Creating a living trust also guarantees that your properties will not go to probate proceedings, saving your heirs a great amount of time and trouble. You’ll also help protect your financial privacy and set out guidelines for the distribution and use of any assets if you become unable to handle matters yourself. A living trust may be revoked by the creator, also called the Grantor, at any time.
Setting up a living trust is one way of protecting your property and assets from going through the probate system upon your death. This can save your heirs a lot of time and money. Creating a living trust is actually fairly easy, although there are a few things that you need to keep in mind. The first is that the trust documents must follow the laws of the state in which they are written. Living trust laws do vary from state to state, so you will need to speak to a living trust attorney to make certain your document follows state law. Once written, you have to execute the living trust in order to make it legally binding. Below are the steps to setting up and executing a living trust.
The purpose of creating a living trust is often not only because they want to set up a trust for their beneficiaries, but because they want to benefit from the advantages a living trust offers. However, there are some disadvantages to creating a living trust as well, and it’s important to understand the various advantages and disadvantages to a living trust before creating one.