If you are considering going through the estate planning process, you may consider drafting a living trust. A living trust makes it easier to determine what happens to your property and assets in the event of your passing. This article will discuss 4 components of drafting a living trust.
There are several benefits of creating a living trust. The living trust is an entity that can give you a better way to handle your estate when you pass away.
Here are some of the benefits:
It is true that a living trust is typically more expensive and complicated, but once it's done, managing your estate will be much easier.
A living trust that is created by a single individual is known as an individual trust. When you create an individual trust, you do not own the assets, the trust does. You are still able to use the assets.
If you happen to pass away, the assets in the trust will be distributed to the persons you choose as beneficiaries. It will be the person you designated as trustee who will manage this process
If your trust will be created by you and another person, it will be known as a joint trust. Joint trusts are usually created by married couples. Just as in an individual trust, the grantors (people creating the trust) are able to use the assets, but not own them.
If one grantor passes away, the other grantor will be the beneficiary. They receive the rights to the assets and they can make any changes to the trust that they see fit.
If you want to determine when a beneficiary is able to receive their part of your estate, you can use a sub-trust. A sub-trust will stipulate that the beneficiary will not be able to receive their inheritance until a specific time that you designate. The inheritance will be managed by the trustee until it comes time for the beneficiary to claim their inheritance.
Here's an example. You have a rental property that you would like to give to your son when he turns 35. You indicate this in your sub-trust
The person you designated as trustee will manage the rental property until your son turns 35. At this time, the trustee will give the property over to your son and he will own it. A sub-trust is usually used for minor children, but there are times that people use it for adults as well.
If you are thinking about drafting a living trust, you should speak with an estate planning attorney. This will make it easier to make sure that the documents are being drafted properly. For more information, contact a firm such as A Affordable Attorney Gerling Law Group.
26 November 2014