Trusts can help solve a number of estate planning issues.
Perhaps the first thing you think of when you hear the word "trust" is a “trust fund baby.”
You imagine trusts as preserving wealth so future generations do not have to work.
You simply cannot see how a trust could possibly benefit you.
According to a recent Forbes article titled “Revocable Trusts: The Swiss Army Knife Of Financial Planning,” trusts serve greater purposes than merely protecting massive amounts of wealth for children of the leisure class.
You may want to consider creating a revocable living (inter vivos) trust.
What is it?
It is a trust where you create the trust and "fund" it as the "grantor," manage it yourself as the "trustee," and enjoy the assets funding the trust as the "beneficiary."
In short, you retain management and enjoyment rights to the trust assets without restriction.
You can also choose to revoke or modify the trust at any time to better meet your estate planning goals.
How do you create a revocable living trust?
You should work with an experienced estate planning attorney.
He or she will create the trust and guide you when it comes to funding (i.e., retitling asset directly in the trust name or designating the trust as a beneficiary) the trust.
What are benefits to a revocable living trust?
It can help manage assets held in the trust while you are live, whether you are healthy or incapacitated.
You could use either an investment manager or a trust company to manage the trust for you, if you do not want to manage them yourself.
If you were to become incapacitated, you can arrange to have a trusted individual or institution step in as trustee to represent your needs as beneficiary.
Once you recover, your duties would be restored to you.
Without these protections in place, someone may have to petition for "guardianship" to handle your financial decisions and manage your assets.
A guardianship is a time consuming and public proceeding.
A final benefit of a revocable living trust is that your assets will be administered and distributed for your loved ones through the trust rather than through probate.
Ask your experienced estate planning attorney about whether a trust might benefit your estate plan.
When you do this, be sure to address the other components of your comprehensive estate plan, to include a general durable power of attorney, advance health care directives, and a last will and testament.
Thoughtful and strategic estate planning will provide peace of mind to you and your loves ones.
Reference: Forbes (February 20, 2019) “Revocable Trusts: The Swiss Army Knife Of Financial Planning”