A living trust is an extremely helpful estate planning tool that will aid you in the future. Many opt for it because of the many benefits it has to offer. You may be wondering why so many lawyers say that it can save you money if it costs more to have a trust prepared than a will. This is because in the long run, a trust is much cheaper. It avoids the probate process upon your death. If you die with a will it must be presented to the probate court, which is a court that supervises the distribution of your estate. All of this costs anywhere from 5 to 10 percent of the value of your estate. So, the trust may cost more at the beginning than a will, but it will eliminate the probate process. You do not have to give it up or put it in the hands of a third party. You have the power and authority to buy and sell, or reinvest your assets. Here we do our best to break down the different kinds of trusts to you as well and help you choose the one that best fits your life. If you died without a trust, your estate would go through probate, which on average takes one to two years. A trust can be settled in as little as one to two weeks. If your estate were to go through probate, all of your records are made public. Anyone can access them. The trust remains a private family document and is not required to be filed publicly.
The IRS actually calls this kind of trust a “grantor” trust, meaning that you do not have to file a separate tax return or separate ID number. It just reports all of the income on your 1040 tax return and uses your social security as the ID number so there are no additional forms to file. You may remove or eliminate the estate tax altogether or at least reduce it by creating a living trust. You can put your property into a trust before you marry if you are worried that you may lose it in an unforeseen event (like a divorce). It will then become your sole and separate property account and your spouse may not claim it. So you may not need a living trust, but it will be very beneficial for you and your family after your pass. No one will be scrambling to figure out what your last wishes were or who you wanted to distribute assets to, they will just be able to mourn your loss without any added stress.
Contact an Estate Planning Attorney
You can rely on our diligence and experience to create a trust you are proud of. We will also ensure that everything gets transferred to your loved ones or rightful heirs after you die. We can help you create a trust and answer any questions you may have. An attorney, like the revocable living trust attorneys in Philadelphia, PA, can ensure that you are making the proper decisions regarding your living trusts.
Thank you to Klenk Law for providing their insight and authoring this piece on living trusts.