Pros And Cons Of A Living Trust – In Mississippi, estates can be complicated, especially for those with multiple assets and estates. A living trust is an important document that protects these things, and this post serves as an example of putting together the right plan.
A living trust works to easily transfer assets to the creator or settlor of a trust while bypassing the complexities of probate. These trusts appoint a trustee who has legal possession of the assets and property going into the trust. There are retractable and irreversible versions.
Pros And Cons Of A Living Trust
Simply put, probate is a time-consuming and expensive process that places assets in a state of limbo that the family can tire of going through. If a living trust is created, the assets can be transferred to those who are deemed to be the next settlors and the courts do not need to get involved. A revocable living trust allows family members to access critical funds after the death of a loved one. Without it, the family may not be able to receive the money until the will is opened.
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If you are disabled or unable to make decisions for yourself, a living trust can appoint someone to look after your affairs instead of dealing with a guardianship or conservatorship. Your successor trustee can take control of your trust assets without court intervention.
Writing and completing these documents takes time and should be done in consultation with an estate planning attorney. As everything comes together, you’ll need to change the names of accounts and properties to be in the trust’s name, and rename things like cars and boats. On top of that, you’ll need a will and a detailed estate plan to make sure all your assets are accounted for — not just those in trust.
Mississippi estate law is complex and the best way to ensure that your wishes are carried out is to work with a competent and professional estate planning attorney. The Law Office of Rusty Williard sources clients from all over the state and they are here to help. Call (601) 824-9797 to schedule a free consultation.
Since 1985, The Law Offices of Rusty Williard has provided reliable and efficient legal services in a variety of practice areas including family law, divorce, no-fault divorce, spousal support, child support, child custody, domestic violence, criminal defense. Estate planning, wills, testaments, trusts and more. Pros and Cons of Revocable Living Trusts A revocable living trust is more than just avoiding probate.
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Julie Garber is an estate and tax planning expert with over 25 years of experience as an attorney and trustee. He is a vice president of BMO Harris Wealth Management and a CFP. Julie has been quoted in The New York Times, New York Post, Consumer Reports, Insurance News Net Magazine and many other publications.
Michael Boyle is an experienced financial professional with over 10 years of experience in financial planning, derivatives, equities, fixed income, project management and analytics.
The whole concept of Desha Trust carries a certain mystique. You may think that they are only for the very wealthy, or that they are more difficult to create than a simple last will and testament. But they can be the perfect estate planning tool for others.
Revocable living trusts have both pros and cons, from avoiding a will to the costs involved in creating one. Deciding which is right for you depends on your personal concerns and circumstances.
Step By Step Guide To Setting Up A Family Trust
Assets in a trust avoid probate because the trust itself does not die with its creator—known in legal terms as a “grantor” or “trustmaker.” The trust survives the death of its grantor and can transfer its assets to anyone designated by the grantor in the trust documents, according to the grantor’s own terms. No need for judicial oversight or involvement.
Avoiding probate is perhaps the greatest benefit of a revocable living trust. This can be an especially important consideration if you own real estate in more than one state, as your loved ones may face two or more probate proceedings if you leave only one will. Every asset should be tested where it is.
A revocable living trust gives your loved ones immediate access to money in times of need. Your loved ones will usually not be able to access your bank account until the probate is officially opened. Ask yourself how they will pay for funeral expenses and other necessary expenses until then.
Revocable living trusts aren’t just for death. They can allow your loved ones to avoid an expensive court-supervised guardianship if you become disabled and an expensive court-supervised guardianship after you die.
A Guide To Living Trusts
If you are incapacitated, your loved ones and your assets are subject to guardianship or conservatorship rules. Creating a revocable living trust involves appointing a successor trustee, someone who will step in and manage the trust for you when the time comes. You can no longer mind your own business.
Your successor trustee can take control of your trust assets without court intervention after following the provisions of your trust to determine your incapacity.
Probate is a public process. Anyone can go to court and see any document filed there, including your will. In some states, strangers can search for court documents and records online. Everyone can see the extent of your property to bequeath to others and can find out who got what when the probate is opened and your will is filed in court.
Setting up a revocable living trust and setting up the funds usually takes more time and money—up to three times more than simply writing a will, at least initially. But in reality, the cost can be quite comparable because probate also costs money. This cost should be added to the cost of writing a will for a fair comparison.
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Once you create it, you must create new deeds and other documents to transfer ownership of your assets to the trust. You should contact your bank, investment and insurance companies and transfer agents. You must change ownership of the account and shares and update the beneficiaries. New share certificates must be issued. Cars and boats should be renamed.
However, a major disadvantage of using a revocable living trust for many people is that if the trust is not fully funded, it may not be worth the time, money and effort to set it up. The type of assets you have and what needs to be done to fund the trust should be carefully considered before you decide to use this estate planning tool.
You can partially fund your trust when you die if you acquire new assets and neglect to transfer them to the trust. Over time, it can be surprisingly easy to forget to transfer ownership of newly acquired assets to your trust.
In this case, you need a special type of will called a “pour-over will” to “hold” your non-fund assets. As the name suggests, a will “pours” them into your trust at the time of your death. Your overflow will should be tested, but it can still be a valuable back-up tool in a worst-case scenario.
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In addition, certain assets cannot be owned by a trust. These include certain retirement plans and assets you may jointly own with someone else. For example, you cannot transfer ownership of half of your home to your trust if you own it as joint tenants. You need an alternative method of transferring ownership of these assets, but you can still avoid the test if you use beneficiary designations.
Most states have specific laws that dictate who can challenge a last will and testament and for how long. The period can vary from 30 to 120 days.
Unlike a living trust challenge, this was a wide-open court that until recently was bound by state-specific laws. These statutes are usually one to five years, but can sometimes be even longer.
Several states have begun to fill this gap by passing specific laws that severely limit the time frame for trust challenges.
Is A Revocable Living Trust Right For You?
It is important to speak with a legal professional when dealing with something as important as estate planning. You want to be absolutely sure that you understand all the pros and cons of your decisions. This article is intended to convey general information and may not be directly applicable to your unique issues. This is not legal advice. You need a lawyer for that.
The terms of a revocable trust can be changed at any time by its creator. It can be dissolved or removed. An irrevocable trust is more ironclad and usually requires court intervention to allow it to be dissolved or its terms changed. But it offers great advantages such as removing all assets from the taxable estate of its creator.
All income generated by a revocable trust goes to its grantor or settlor because that person has not completely relinquished control of the assets.
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