A living trust can serve a variety of different important purposes for estate planners. Because living trusts can be helpful alongside a will or on their own, they are an important estate planning tool for estate planners to understand.
A living trust can care for beneficiaries, help the estate planner and their family avoid probate and can also be revocable in nature. A living trust can be used on its own or as part of an overall estate plan. A living trust can be used as part of an estate plan to reduce taxes, ensure greater financial privacy and can direct the use of assets of the estate planner becomes incapacitated.
The probate process can be time-consuming and costly which is why many estate planners may wish to avoid it. In addition, the probate process is a public process so documents that are part of the estate plan, including a will, become public record. Utilizing a living trust as part of an estate plan can help maintain privacy and resolve the estate more quickly. When a living trust is used, property in the trust will be transferred directly by the trustee to the beneficiaries without the need for probate which is a court-directed process to administer the estate. The probate process can take time and fees are associated with it which is oftentimes why estate planners wish to avoid it.
There are lots of things to know about living trusts, including how to create a trust and the potential benefits of a trust. As a result, estate planners should be familiar with how trusts work and can help them during the estate planning process.