A living trust can be a useful tool for the future distribution of your assets. Unlike a will, which only becomes active after your death, a living trust, also known as a revocable trust, goes to work during your lifetime and can continue seamlessly after your passing.
A living trust can offer several advantages. The most well-known benefit is the opportunity to help your estate avoid probate. Probate is the court-supervised process of validating your will, paying debts, and then distributing your assets. Probate can be lengthy, expensive, and public. However, assets held within a living trust can bypass probate. This means your heirs can receive their inheritance more quickly, with less hassle, and without the details of your estate becoming a matter of public record. This privacy and efficiency can be a significant relief for your loved ones.
Another reason to consider a living trust is planning for a time when you can no longer manage your financial affairs. If you become incapacitated due to illness or injury, a successor trustee you have designated can step in to manage the trust assets on your behalf. This avoids the need for a court-appointed conservatorship or guardianship, which can be a stressful, time-consuming, and costly process for your family. Your living trust provides a clear framework for managing your affairs according to your wishes, even if you are no longer able.
Living trusts also offer a greater degree of control over how and when your assets are distributed. For instance, you can specify that your beneficiaries receive their inheritance in installments, at certain ages, or upon reaching life milestones, such as graduating from college. This can be particularly useful if you have minor children or beneficiaries who may not be prepared to handle a large sum of money all at once. And you can include a generous contribution to Baystate Health Foundation in your living trust.
Although setting up a living trust involves some initial effort and cost, the long-term benefits of privacy, efficiency, incapacity planning, and control over distributions make it a worthwhile endeavor. A living trust offers a comprehensive way to manage your assets during your lifetime and ensure they are passed on according to your precise wishes with minimal complications for your loved ones.