A living trust, or revocable trust, is an agreement that provides for the management and distribution of your assets during and after your lifetime. It is a particularly important element of estate planning and many people can benefit from the security a trust provides provides. While trusts can be revocable or irrevocable the living trust usually refers to a revocable trust. Revocable refer to the fact that the trust can be changed, or revoked, during your lifetime. This type of trust provides several important benefits:
Deciding whether to create a living trust requires analysis of the extent of your assets, the types of assets you own, and your personal preferences concerning their management. Many people prefer to keep personal, unfettered control over their assets for life – while others may be willing to have their resources managed for them.
Trusts are governed by state law and should be written to meet your specific needs and preferences. Like wills and other legal documents, trusts should be prepared by an experienced Trust and Estate attorney who is licensed in your home state. Any document like a trust must be reviewed regularly to reflect changes in the law or in your family or financial circumstances.
Most people will be trustees of their own living trusts, but a successor will have to be named for continuation after their death or in the event of disability. Choosing a trustee requires careful thought and your attorney make recommendations as to the best choice. Some individuals and families may choose to nominate a professional fiduciary to manage their assets when they pass. This has the added benefit of allowing a neutral third party to professionally manage and distribute your assets, but does have an added cost.
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