This article is intended for educational purposes only and is not legal advice. For guidance on your personal situation, please contact a lawyer.
Estate planning can be an emotionally daunting and time-consuming affair for anyone, including people in the midst of building their careers and raising families.
But, if that's you, now is also the time to consider how you wish your assets to be distributed when that time comes -- and after all, who knows when that will be, right?
There are many ways to leave it all behind, including simply gifting, creating a simple will, and then on to trusts and various other complex instruments. One to consider here is the living trust.
What is a living trust?
A living trust designates how you want your assets managed while you're alive and distributed after you're not. You're the grantor and the trustee, which means you transfer the investments, cash, real estate, etc. into the trust and then keep control of the assets during your lifetime.
After you die, the assets are distributed according to your written wishes, under the management of the successor trustee you named in the legal document that created the trust.
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Keeping costs down and privacy up
A living trust is a private document and it avoids the time and potential public glare that can come with going to court to go through the formal probate process of having your will evaluated and assets distributed.
Wills typically must go before a probate court for administration and distribution. That can be a time-consuming and expensive process, depleting some of the assets you want to use to pay it forward in the first place.
A trust -- and a living trust is just one of many types -- provides a streamlined process that helps ensure your beneficiaries get the full amount you intended.
Plus, probate records are public. Trusts are not. If privacy about your assets -- including how much you left and to whom -- is important to you, a trust may be the way to go.
Getting granular with your giving
As the grantor, you can name beneficiaries, how much they get, and when they get it. That can include spouses, children, other relatives, business partners, the local dog shelter, you name it.
These detailed instructions can head off arguments and ensure assets are divided per your exact specifications.
Find the right fit now
A living trust can be the right way for you to distribute your hard-earned wealth in the way you find most gratifying and appropriate, and it can be combined with a final will and testament, too.
Whether it's the best way depends on your desire for control and efficiency in the process, as well as the size and complexity of your estate.
Consult with a trusted estate planning attorney and financial advisor to fully assess your situation and determine if a living trust provides the optimal solution for your goals and priorities.
Taking the time to do that now can help you feel confident that you've made the most financially savvy decisions for passing on the fruits of your labors.
