You will accumulate assets that you have legal ownership over during your lifetime. Your name is on the title of your car, the deed to your home, and you—and perhaps your spouse—are the only ones who can access your bank accounts. There are levels of protection to ensure that what we own cannot be taken. When you pass away, suddenly or otherwise, the transference of what was once yours to another person can be highly complicated.
This is something that everyone has to deal with. If you have a joint bank account, your spouse may have the right of ownership if you were to pass away. However, what happens when your spouse passes away? Who is entitled to receive the funds in the account? The safeguards we use to protect our assets explain why people establish living trusts.
You will avoid the probate process by creating a living trust, and this fact alone makes people consider them. (Wills require a probate process, and they are also public.) After establishing a living trust, you can put your assets in it. This is known as funding the trust. Attorneys who create living trusts will also explain how to adequately fund the trust so your loved ones can benefit from your diligent estate planning. Unlike wills, living trusts are not public, and they avoid the probate process.
Transferring your assets to someone else can be challenging without proper estate planning. For example, imagine someone who has passed away without creating a will or living trust. A judge appoints an executor who will then use the money in the account to settle any outstanding debts before distributing what remains according to intestate laws. It is also important to remember that the probate process can take several months to a year, and that is without factoring in the possibility of litigation.
When you create a living trust, you can place your assets into it (funding), and you will also appoint a trustee. Upon your death, the trustee only needs to obtain a death certificate, the certification of trust, and perhaps even the trust document itself (which the trustee will have) to access that account. Then they will distribute the money to the beneficiaries per the instructions outlined in the trust document.
Another significant advantage is that you will have access to everything inside the trust during your lifetime, but you can also take assets out of it. If you choose to sell your home, you can remove the property from the trust and add additional pieces of real estate. Living trusts are fully revocable.
Other people may have significant amounts of money and assets. Everything gets distributed during probate if you pass away suddenly (and haven't created a will or living trust). With a living trust, you can stipulate how these assets and money get disbursed over what period of time. Your trustee can manage the money and then give it to your grandchildren, for example, when they turn a certain age. People who establish living trusts can create a legacy.
The attorneys at Hamilton Law have extensive experience working with clients who wish to create living trusts. We can also provide legal advice for successor trustees who manage trusts after the person who made it passes away. Contact the attorneys at Hamilton Law today to set up a complimentary consultation.