Pay for your funeral while reaping benefits
A living trust is a different form of estate planning -it varies from a will in that it can take effect while the grantor is alive. And, unlike a will, a living trust is exempt from probate. A living trust holds ownership of an individual's assets during his or her lifetime and also provides for distribution after death. Note: it is important to recognize that a living trust is entirely different from a living will.
Why Buy a Living Trust
A living trust gives the grantor more control over estate planning while he or she is still alive. The big advantage to a living trust is that it isn't subject to probate, which can be expensive. This is because the trustee is legally considered the owner of the assets; the deceased is not.
Funding the Trust
A living trust is funded by the assets of the trust's grantor. For the trust to take effect, the grantor must transfer assets, including real estate deeds, titles to bank accounts and stock certificates, into the trust.
Living Trusts and Pour-Over Wills
A pour-over will can be used to supplement a living trust. It covers any property that a living trust grantor acquires after purchasing a living trust agreement. Used in tandem, these can guarantee that all estate planning will be carried through in accordance with the wishes of the deceased and all laws of intestacy will be avoided.
Trust a Lawyer
If you've purchased a living trust, you should have it reviewed by a lawyer. You can also make changes to it when you feel you need to.
You can serve as the trustee yourself, or you can select a person or an institution to be your trustee. If you name yourself as the trustee, you'll have to name a successor trustee who'll be in charge of distributing assets after your death.
Living Trust Scams
Unfortunately, there are a number of living trust scams to watch out for. Salespeople have always preyed upon the elderly, but implementing the fear that assets will not be distributed properly by any other means than a living trust, is a ploy that could work on anyone. These scammers might charge thousands of dollars for simple legal forms. In other cases, little attention is paid to the consumers' individual needs, and still more often, seniors buy the trust and are then told to consult an attorney, effectively nullifying the need for the trust.
The Best Advice
A poorly-drawn trust could end up being meaningless or at the least it could endanger your best intentions. Avoid 'living trust kits', unless they come from a reliable source. Work with a lawyer to ensure that you're getting what you need from a living trust while you're estate planning.