If you have not spent much time delving into the topic of estate planning you may just feel as though preparing the distribution of your assets after your death involves simply drawing up a will unless you are a person of extraordinary means. This is one way that it can be done, but it may not be the best way. Most people want to do whatever they can to make sure that their assets stay intact as the are being passed on to the next generation, and due to some of the powers that be you may need to take some steps to avoid asset erosion.
One of these powers is the probate court. The process of probate can consume as much as 5-7% of the value of your estate, and many people would prefer that their loved ones receive that money instead. With this in mind you may choose to pass along most of your assets through a revocable living trust rather than a will.
When you create the trust you appoint a trustee and name beneficiaries who will succeed you after your death, but while you are alive you can assume both of these roles. So you retain complete control of your assets, and since the trust is revocable you can change it or even dissolve any time if you so choose. Upon your death the successor trustee assumes the responsibility of administering the trust and your beneficiary receives distributions in accordance with your wishes as set forth in the trust agreement. This arrangement is not subject to the probate process.
Aside from the avoidance of probate a revocable living trust can protect in other ways. You can appoint a bank or trust company as the trustee and stipulate that your beneficiary is to receive only the income earned by the trust and none of the principal unless an emergency was to arise. In this way you install some safeguards to ensure the long-term viability of the trust with the best interests of your beneficiary in mind.
Latest posts by Saul Kobrick (see all)
- Senior Suicide – Do You Have a Loved One at Risk? - March 21, 2019
- Durable Power of Attorney and Elder Care Considerations - February 28, 2019
- When Is Probate Not Necessary in New York? - February 26, 2019