A Living Trust is a legally binding document that protects the individual and manages their assets. It gives the trustee authority to assist if the individual is incapacitated due to accidents or illnesses and unable to make decisions, related to their business, home, bank accounts and investments. A Living trust protects the individual’s family by ensuring they receive payments and avoiding probate.
The individual creates a living trust while able bodied and of sound mind. Unlike a will that comes into effect once the person is deceased, a living trust is active during the individual’s lifespan. They continue drawing from their assets.
There are two Living Trust types people can choose from. A revocable Living Trust gives the person freedom to change, update or cancel it at any time.
An irrevocable Living trust is a fixed document. The individual cannot make any changes to it.
Is a Living Trust better than a Will?
While a Will and a Living trust detail the distribution of a person’s assets, their functions are different.
A will is effective only when a person is deceased. There is no protection of a person’s assets while alive and it goes into probate. The public court process is lengthy and costly, which the family may find stressful.
Additionally, it does not offer protection should the person become incapacitated. The family is left seeking court approval to manage estate matters, like managing finances or making decisions on the person’s behalf.
However, a Living trust is activated immediately after signing the document. It protects the individual while they are alive, allowing them to manage their assets as the trustee while giving a successor trustee the authority to step in if they are unable to.
It avoids probates, ensuring no delays with distribution of funds to the recipient family and it keeps the individual’s affairs private.
Despite having a living trust, it is essential that the person have a will too. A will allows the individual to name a guardian for any minor children or dependents. It defines the power of attorney and drafts any end of life wishes.
Costs to Set Up a Living Trust
While the set up costs of a living trust vary, it may surprise people that it is less expensive than the potential cost of probate. The costs may vary based on the estate’s complexity or geographical location in California and whether the person is setting up the trust for an individual or couple. People can choose between working with an attorney, using an online service or a DIY option.
When setting up Living trusts in major California cities, like the Bay Area or Walnut Creek, the person can expect higher attorney fees. DIY or online living trust may seem efficient and quicker; however, it is better to have an attorney-prepared trust. This provides personalized legal advice, customized planning and confidence that the trust meets California’s legal requirements.
Choosing the Right Trustee
The person selected as trustee controls the individuals affairs if they cannot. Therefore, they must choose a person they not only trust but also are responsible, reliable, and aligned with the individual’s wishes.
Final Thoughts
A Living trust is an essential aspect of estate planning. It gives the person control, keeps their affairs private, and ensures the family is shielded from unnecessary stress. For more information on building a living trust centered on living benefits, visit www.camulivingtrust.com
