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5 Important Reasons to Create a Living Trust

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When you are deciding what estate planning tools to use, a living trust should definitely be one of the options under consideration.

A living trust is a special type of legal arrangement. You create and fund a trust, and that trust becomes the owner of the assets you transfer into it. You also name beneficiaries who will benefit from the trust.

1. Living Trusts Provide Flexibility

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Some trusts, known as irrevocable trusts, are designed to be permanent and cannot be easily changed or revoked. Once established, the terms are generally set, requiring careful consideration beforehand, as they involve relinquishing a significant degree of control over your assets.

With living trusts you can keep managing the assets in your trust by naming yourself as the trustee. You have the flexibility to make changes, allowing you to retain control over your property even after placing it into a living trust.

2. Living Trusts Offer Protection in Case of Incapacity

If you become unable to manage your own assets, a living trust can ensure that your property is protected by naming a successor trustee for the living trust. This is a person who will take over the management of your assets when you are no longer able to take care of your own possessions because of mental incapacity.

Without a living trust, you would need to consider alternatives like granting someone power of attorney. However, appointing a successor trustee can simplify matters, allowing them to seamlessly manage your trust assets if something happens to you. This approach also spares your loved ones the concern of arranging for a guardian to manage your assets in the absence of prior planning.

3. Living Trusts Can Allow Your Heirs to Inherit Outside of Probate

Assets held in a living trust bypass the probate process, allowing your heirs to inherit through trust administration. This process is typically much simpler and less stressful for your loved ones, who will already be coping with your passing and may prefer to avoid the additional burden of court proceedings and other logistical issues.

Sparing your loved ones the probate process will not only make their lives easier, but it can also help to reduce costs associated with the legal process. This means more of your hard-earned money is left to be distributed to trust beneficiaries instead of going to cover the costs of probating your estate. 

4. Asset Transfers Can Happen Privately with a Living Trust

If assets are transferred during probate, then the court proceeding becomes part of the public record. This means anyone can determine who inherited or what type of property was transferred with the estate.

Many people don’t want all of this information to become public knowledge. With the creation of a living trust, it doesn’t have to. The trust administration process can happen much more privately, so your heirs can inherit without the whole world knowing the inner details of your financial situation. 

5. Heirs Can Inherit More Quickly With a Living Trust

Another significant advantage of a living trust is the speed of the trust administration process. Assets can be transferred via the trust much more quickly than through probate, which can sometimes take months or even years to complete.

Many people prefer not to wait months for their loved one’s estate to go through probate to receive their inheritance. Certain assets may require specialized management, making a swift transfer to the new owners essential.

The prolonged probate process can also delay emotional closure. For those seeking to move on and rebuild their lives, waiting for inheritance and court proceedings to conclude can add stress and intensify their grief. Fortunately, with trust administration, it’s usually possible to wrap up the transfer property within week.

These are just five of many reasons why creating a living trust is a smart decision when making an estate plan. Contact the McGee Law Firm at 817-899-3286 today to get the assistance and advice you need to put a comprehensive plan in place.

Brandon McGee
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