Your net worth should have little to do with deciding to form a living trust. A living trust exists in order for a person to decide how his or her assets will be distributed post-death while that person is still alive. If you were to form a living trust today, you would ensure that your desired wishes for your assets are met, and ultimately also help your family avoid a lot of added pain and stress after you are gone. Those who are married or have children will most certainly want to make their wishes known. A living trust does more than dictate who will inherit assets. If the circumstances are such that children are involved, a guardian will need to be appointed. A living trust stipulates who will be that guardian or guardians, and who will be the person appointed to manage the property left to the children. A living trust exists to address these real-life decisions and ease the transition for loved ones left behind.
A revocable trust is a type of living trust whereby the assets or value of the trust can be altered or canceled if the grantor, or owner of the assets, wishes. The assets in a revocable trust can be moved around as long as the grantor is still alive, at the discretion of the grantor. In fact, as long as the grantor is alive, he or she has the flexibility to change, move around or add to the assets. However, this also means that assets can be revoked, depriving the originally intended beneficiaries from receiving anything after the grantor’s death. Still, however, one of the advantages of a revocable trust is that more assets can be added to the trust over time as long as the grantor is living. The grantor’s assets or wealth can increase during a lifetime, which means more value can be added to the revocable trust. The beneficiaries, of course, stand to gain from this increase in assets.
A revocable trust is also advantageous because it avoids probate. Why is this important? The probate process can be long and grueling. Probate is the court process of deciding how assets of the deceased should be distributed, in the absence of a trust and it can be very costly. Probate fees can easily eat into the assets that would have gone to a beneficiary or multiple beneficiaries in full had those assets been properly administered in a living trust. Essentially, avoiding probate “keeps it in the family”. Also, with a revocable trust, the assets are distributed to heirs or beneficiaries fairly quickly after the grantor’s death.
Careful estate planning is also important for people who know they will be incapacitated due to illness, and also for those who will need to define their wishes under end-of-life treatment. This is when a living trust becomes especially pertinent. A living trust can be implemented and managed during its grantor’s lifetime. This means the grantor can appoint someone, a trustee, to carry out the wishes expressed in a living revocable trust.
Deciding to have a living trust is an excellent first step to securing your family’s financial future. The next step is deciding on the right lawyers. The attorneys at Velasco Law Group respect the sensitive estate planning. They show their clients patience from the moment they meet them. Families should be made to feel comfortable sharing sensitive personal and financial information.
Take that most important first step to begin planning for the Future, contact The Velasco Law Group at one of their three Southern California locations in Long Beach, Downey or Irvine.