7 Reasons to Consider a Living Trust

A valid will is not enough to ensure the security and timely distribution of your assets in accordance with your wishes when you die.  You should consider establishing a living trust in addition to your will.

The larger the value of your estate, the greater the need to create a living trust and ensure the transfer of your significant assets into it while you are still alive.

Read on to find out more about the seven reasons to consider a living trust that will protect your estate and save your heirs time and money.

But, first…

What Is a Living Trust?

living trust is a legal, enforceable document that holds property transferred by the Grantor (aka the Trustor, which is the person or persons who created the trust) for the benefit of others (the beneficiaries) and managed by the Trustee.

It is called a “living” trust because it is established while the Grantor (Trustor) is still alive. It can be designated as either revocable or irrevocable. A revocable trust can be revoked or amended by the Grantor, who signs the trust document. 

Let’s say you have decided that a living trust is well worth the extra time and expense of setting it up (it is more complex than just making out your last will). You need professional advice in order to get it done right. Learn more here.

The primary purpose of a living trust is to manage your assets during your lifetime and to enable this property to be distributed to your beneficiaries (e.g., surviving spouse or children) easily, without having to go through probate.

What Are the Benefits of a Living Trust?

There are several reasons to have a living trust created, but it is not needed in every case. For a young married couple with few assets and no children, just having a will may be good enough. 

But, for situations where assets have been accumulated and you want to ensure timely and orderly distribution to your beneficiaries upon your death, read on.

Avoid Probate

One of the biggest reasons to have a living trust is to avoid probate.  Probate is a legal mechanism by which the decedent’s estate gets settled under the supervision of the court, or judicial authority.  Unless there is a living trust set up!

The purpose of probate is to prevent fraud after someone’s death. The court must determine the validity of the will, that all pertinent people have been notified, that all property has been identified and appraised, and that all creditors and taxes have been paid.   

Only after all that has been done will the court allow distribution of assets and closing of the estate. Until then, it is a waiting game for the beneficiaries.

Once you die, South Carolina law requires that your will is to be delivered to the Probate Court within thirty (30) days — unless you have a living trust. 

The key to avoiding probate is to ensure that the trust is “funded” before you pass away. You must transfer ownership (separate paperwork) of all your significant property, cash, stocks, and bonds to the trust — to be administered by the Trustee. 

South Carolina has a “small estate” limit of $25,000. There is simplified probate (called an out-of-court affidavit procedure)  available in South Carolina:

  • If the value of property passing by will or under the law — except for liens and encumbrances — is $25,000 or less, a probate judge may approve the affidavit
  • There is a 30-day waiting period

Decreased Estate Taxes

If you are married, the trust can provide for estate tax savings, especially if it is a joint living trust. Of course, much of the savings depend on the value of your estate at the time of your death. 

Also, any costs associated with the probate process are deducted from the estate. So are any court costs associated with contesting a will. Those costs could be avoided if a living trust is legally and properly established and funded.

Greater Privacy for Your Beneficiaries

A will is a public document and all probate proceedings associated with that will become a matter of public record (including listing your assets). A living trust is a private document and distribution of your estate upon your death is private, too.

Protects Your Interests during Your Lifetime

Once your living trust has been created and funded, if you later become incapacitated, the successor trustee you designated will be able to manage the trust assets for your benefit — without any court intervention.

This is a big benefit for people who are single or those who do not have children. The living trust arrangement ensures that you are provided for during your lifetime even if you cannot make decisions for yourself.

This is important, though. As long as it is set up as a revocable living trust, if you dispute the determination of your incapacity, you can revoke the trust and retain control yourself.

Protects Your Minor Children

Minor children are often not responsible enough to manage large sums of money themselves. The trust can be set up to disperse money to children when they get older and more mature, or even to distribute funds staggered over a range of ages.

Protects Your Adult Children

Some adult children may never be able to manage an inheritance on their own, maybe due to a substance abuse problem or just because they are frivolous with money management. The trustee can dispense funds as needed over time.

Keeps Your Assets Out of Unwanted Hands

Say you have a child who is marrying a person you do not care for. What if they were to divorce? You do not want half of your assets winding up with your child’s ex-spouse.  

These Are Great Reasons to Consider a Living Trust

At Indigo Family Law, we are experienced at creating living trusts. Our team can help you go through the complexities of getting one in place to benefit you and your heirs. 

Now that you know why you should consider a living trust, contact us today and let us help you get all your questions answered.

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Keep the Finances in the Family: 5 Benefits of Making a Trust

Imagine this sad, but all too possible, situation.

You are married with four, five, six kids. You have a will — that you and your spouse created a decade and three kids ago!

Your younger children’s names are nowhere on your will. They would get left out of anything should something happen to you or your spouse. Your oldest child may get your entire estate, whether they are capable or not.

This is the situation that made my husband and I stop in our tracks. While driving home one day, I realized that if I were to get into an accident, my finances were not prepared. I had an outdated will and no living trust.

Don’t let this scenario happen to you and your loved ones! Establishing a trust is important for all families. 

Keep reading to see why this is true!

Living Trusts Go into Effect Now, Not Later

Will vs. living trust is a common debate with a semi-complicated answer. But, we see at least one major reason to consider a living trust instead.

A will goes into effect in the event of the maker’s passing. But living trusts go into effect now, before anyone’s passing. This is especially important in the event that you become physically or mentally incapable before writing a will.

Making a Trust Guarantees Privacy

Wills are worked out in probate court. After the will-maker’s passing, they become public record. They are contestable, public, and can be argued into changing!

A living trust avoids probate court, making them private and uncontestable. What the writer says goes! It cannot be fought by disgruntled friends or greedy family members.

Your Property Avoids Probate

If you put your property into a living trust, you can avoid probate (as we mentioned). The trustee named in the trust agreement can step into the shoes of the trust maker without hassle. 

Probate is not required for transferring ownership; the beneficiary does not own the property. It is a separate legal entity.

It Protects Your Property from Incapables

Let’s say the total of your assets and estate is a large dollar amount. If you have an eighteen-year-old, you may not want the total going to them — yet.

A living trust allows your assets to be divvied out smartly over time. Your trustee allocates a discussed amount to the beneficiary in increments. This can help prevent irresponsible spending in youth, addicts, or unsmart spenders.

It Protects You If You Are Incapable

This ties into our first benefit of living trusts; they go into effect immediately. 

This even helps in that event that you become incapable of dealing with your finances or estate. If you become mentally or physically incapacitated, a living trust covers your assets. It puts them in the hands of a pre-approved (by you) trustee.

Trust Us: You Need a Living Trust

Now that you see why making a trust is so important, it is time to get writing!

Use careful consideration to decide what you want your living trust to cover — and for whom.  Remember, it is never too early to start drafting it. No one is guaranteed tomorrow.

A family attorney can help you make the appropriate decisions. Here is how to find the best one in Myrtle Beach!

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Assets from the Afterlife: How to Set Up a Living Trust

Being a loving parent or spouse does not just involve being there for your loved ones in the present. Responsible people will make sure that their loved ones are cared for in the event of their death.

Preparing for death can be difficult for everyone involved, and matters of divorce or other family changes can make things more complicated. When the time comes, the last thing you will want to do is trouble yourself with a lot of legal paperwork.

Because they want to be prepared, it is not unusual for people to ask their attorneys how to set up a living trust.

You may have heard of wills, but you may not be aware of how setting up a living trust could benefit you and your loved ones.

If you want to learn of a reliable and simple way to care for your loved ones in the afterlife, read on to learn more. 

Why You Should Create a Living Trust

A living trust is a written legal document that allows your assets to be placed into a trust for your benefit during your lifetime. Once you pass, they are transferred to designated beneficiaries of your choosing (also known as a successor trustee). 

Some consider setting up a living trust because they want to avoid the headaches of probate

Even if you have a valid will, your estate will need to go through probate. Court proceedings will distribute your assets through your executor.

A living trust does not need to go through probate. Your successor trustee will pay your debts and distribute your assets in accordance with your instructions.

Not having your living trust go through probate means that your assets can be distributed quickly. Sometimes wills can take months or years to be determined.

Others choose living trusts because they value their privacy. Wills are on public record and the distribution of assets can easily be found. 

How to Set up a Living Trust

Now that you know the benefits of a living trust, you may be interested in learning how to make a trust for your family and assets. 

Setting up a trust of any kind can be a simple affair as long as you have the help of an experienced lawyer. But to make things easier for them, make sure that you take these steps before you head to their office. 

List All of Your Assets 

Some people can underestimate the amount of assets they own that need to be distributed appropriately. Property, stocks, and money are assets, but so are prized possessions like jewelry, fine china, and collectibles. 

Making a list of all your assets will be able to give a lawyer a clear picture of your estate. It will also make it easy for you to divide up assets fairly. 

While you are at it, be sure to gather important paperwork like titles, deeds, stock certificates, and life insurance policies in case your lawyer needs them.

Determine Your Beneficiaries 

Do not make the mistake of waiting until you meet with your lawyer to choose your beneficiaries. Take all of the time you need to think about how you want to distribute your assets.

While you are thinking about dividing up your assets, it can be equally important to think about who you would not want to give assets to. If you are going to keep assets from a former spouse or other family members, be sure to bring it up to your lawyer.

Choose Your Successor Trustee

Your successor trustee will pay debts and distribute your assets in accordance with your instructions after you pass. It is also important to remember that they will handle your affairs if you are incapacitated.

That is why it is important to choose someone you trust.

Your successor does not necessarily have to be someone you are related to. It could be a trusted friend, lawyer, or anyone you think could best handle your affairs.

Protect Your Family

Now that you know how to set up a living trust, you are ready to start putting it together.

We are always here to help families make the best decisions for their children’s future. Read how we have helped other families by viewing our testimonials

While you are on our site, be sure to read our blog for other helpful legal and parenting advice.

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