Did you know that it can take around two years for your assets to be distributed to your heirs after you pass away? Apart from this delay, the process can also easily cost anything from 3% to 7% of the total value of your assets.
Fortunately, having a living trust can bypass this process entirely. To establish the best estate plan possible, you need the help of a living trust attorney in Denver. Lewis & Matthews PC are your partners in everything ranging from estate planning to family law matters.
What Is a Living Trust?
A living trust is basically a separate entity – a trust – created to manage the estate of a person (grantor) while that person is still alive. The person’s properties and assets are transferred to the trust and managed according to its terms. These terms are set by that person as well.
A trust typically has a trustee that oversees the management of the estate within. In this case, while the person is still alive and has the mental capacity to manage the trust, they are the default trustee.
A successor trustee is then specified in the terms of the living trust for when the person passes away. The successor trustee will then be the one to oversee the distribution of the estate to the beneficiaries depending on the terms outlined in the document.
A revocable living trust simply means the document can be changed while the grantor still lives. This is especially useful if the circumstances of the beneficiary, the grantor, or the estate undergoes changes.
Why Should I Create a Living Trust?
A living trust can be useful in many situations and makes the entire process of estate distribution more streamlined and convenient for everyone involved.
A Living Trust Can Bypass Probate Court
The most popular reason many opt to establish a living trust is to avoid probate. Probate is the process where the court oversees the distribution of the estate of a deceased person, which can be both time-consuming and costly.
Probate is triggered when a deceased person has assets in their name. With a living trust, this can be completely avoided. When a living trust is established, the assets are transferred to the trust, therefore, it’s no longer under the grantor’s name.
When the person with a living trust passes away, the entire process of probate is bypassed, and the estate is distributed according to the terms of the trust.
A Living Trust Grants More Control Over the Distribution
A person with a living trust can choose how their estate gets distributed.
- Outright Distribution – The estate is distributed right after the grantor’s death.
- Specific Age – The estate is distributed to the beneficiaries when they reach a specific age. This is usually done for minors, where the trust supports the beneficiary until they come of age and receive the entire estate.
- Specific Intervals – The grantor can also choose to have the estate distributed in parts at specified intervals after their death.
- Legacy Trust – If the trust owns an asset that earns regular income, the grantor may choose to keep that principal asset in the trust while the beneficiaries receive the income it earns. A business, for example, can be a legacy trust.
A Living Trust Protects the Beneficiaries and the Estate
Some additional requirements can protect both the beneficiaries and the estate.
- Spendthrift Provision – This specifies that the estate is not under the beneficiary’s name until they receive it. This protects the assets from creditors during bankruptcy, from divorce proceedings, or from other similar situations.
- Special Needs Trust – An additional provision can ensure that the beneficiary still qualifies for the federal benefits they receive even after they receive the inheritance.
- Additional Requirements – The grantor may choose to add requirements like the completion of a financial education course, drug testing, or others before the assets are distributed.
What Is the Difference Between Will and Living Trust?
Unlike the living trust, a will basically just informs the probate court of how the estate will be divided. It cannot hold conditions in the same way that a living trust can. The estate of a person with a will still needs to undergo probate before it gets distributed.
Depending on the assets, this can become a long and expensive road, especially if the deceased person has properties in multiple states. Since each state has their own probate laws, each asset will need to undergo the probate process based on their location.
This is why we recommend establishing a living trust for your estate planning. Having an experienced living trust lawyer to help you in this process will ensure that the wording of your trust completely adheres to your wishes.
Consult with us to establish your living trust.
Choose Lewis & Matthews, P.C.
There are many details that go into estate planning. With the help of our law firm, you can rest assured that all your wishes will be followed.
We are also adept at handling family law concerns. Whether it’s preparing legal documents or appearing in court, we make sure you are treated fairly and with dignity every step of the way.
We aim to reach the quickest and fairest resolutions.