It is never too early or too late to make critical decisions regarding your estate. Whether you are just getting married or retiring from your career, it is important to create documents regarding what you would like done with your estate should an accident or tragedy occur.
Rather than divide your property in a last will and testament, you may want to consider creating a revocable living trust. Depending on the specific circumstances surrounding your situation, it may be beneficial to use a trust to transfer property and assets to loved ones after you pass.
What is a living trust?
A trust is an estate planning tool that allows property and assets to transfer directly to the beneficiary once you pass. While a revocable living trust allows you to update the terms of the document periodically throughout your life, an irrevocable living trust is set in stone once you sign the final document.
What are the benefits of a trust?
One of the biggest benefits of a living trust is that the document can avoid the probate process once you pass, according to Forbes. Property and assets named in a last will and testament must often pass through probate before they are divided to the proper beneficiaries. Other advantages of a living trust, include the following:
- Trusts will keep the funds and/or property until the beneficiary reaches a certain age or attains a certain position, such as graduates from college.
- Trusts will pay out the assets in increments over a period of time or can transfer the money in one lump sum.
- Trusts can reduce or eliminate estate taxes for you and your beneficiary.
- Trusts can ensure the assets and property stay within the family and will not be divided to spouses of family members.
You can have both a last will and testament and living trust to cover all of your bases as well.