A living trust, also known as an inter vivos trust, is not the most well-known estate planning tool available. For some people, a living trust can be an essential tool for protecting their wealth and minimizing the potential problems that can arise during the probate process. Here are a few questions you should ask yourself to see if a living trust is right for you:
- Are you concerned about estate taxes?
- A major benefit of a living trust is that the assets held in the trust are not subject to estate or gift taxes. While this is not necessarily a concern for everyone, any estate that may be subject to those taxes can lose a significant amount of money simply paying off their tax obligations. If you are worried about how your estate may be taxed, a living trust may be right for you.
- Are you worried about creditors?
- Another major problem that many people need to deal with is creditors trying to go after their estate assets. If you die with any unpaid debt, creditors may try to file a claim against your estate to seek repayment on money you owed to them. With a living trust, however, creditors will have a more difficult time trying to access your money in a trust, allowing you to pass on more assets to your loved ones.
- Do you have advance directives in place?
- The benefits of a living trust do not necessarily begin after you pass away. While advance directives like a power of attorney or health care proxy can assist you if you become incapacitated, a living trust can also serve a role in protecting your interests while you are alive. If drafted carefully, it can be used to help manage your property if you become unable to manage them yourself, protecting your assets from abuse or exploitation.
- Do you have dependents who rely on you?
- One of the biggest concerns that many people have when planning their estate is what will happen to the people who depend on them when they die. This may include minor children, adults with disabilities or elderly relatives with dementia. Fortunately, a living trust can help with this as well, creating arrangements to ensure your dependents are cared for if you are no longer there to care for them yourself.
- Are you concerned about the probate process?
- Probate is the legal process of filing a Will with the court and having that Will administered and funds distributed in accordance with the terms of the Will. Probate of a Will can be a long and costly process, depending on the size and complexity of the estate. With a living trust, however, much of this difficulty can be avoided, as the property held in the trust is considered “non-probate.” This can potentially save you a great deal of time, money, and stress, if the trust is set up properly.
Whether for yourself or for a loved one, estate and elder law planning can be overwhelming and emotionally taxing. The legal professionals at Hobson-Williams, P.C. will advise you on the options available to you, and help you establish a plan that best suits your needs. Call (718) 210-4744 or visit our contact page to speak to one of our attorneys and learn how Hobson-Williams, P.C. can help you gain the peace of mind that comes from being prepared for the future.