Advantages of Putting Assets Into a Living Trust
A living trust is a method of preserving and investing wealth during your lifetime and earmarking the proceeds for designated beneficiaries upon your death. It is also called a revocable trust because it gives you the power to alter or terminate it. Living trusts provide numerous advantages that make them useful tools in estate planning.
One of the biggest advantages of putting your assets into a living trust is avoiding probate. In New York, any estate over $50,000 goes through probate, which is a formal court proceeding for settling a decedent’s assets and debts. Particularly for complex estates, probate can take months and sometimes years to complete and can involve considerable expense. Putting assets into a living trust can reduce or eliminate the amount of property that must go through probate.
Another benefit of avoiding probate via a living trust is privacy. A Probate Court proceeding is public and notice must be given to all your known heirs and creditors, who have the opportunity to raise possible contests. Living trusts are not subject to the same rules. All property in the trust is distributed privately by the trustee to your named beneficiaries. Creating a living trust allows your beneficiaries to receive their specified shares of your assets without going to court or dealing with legal difficulties.
Similar to a will, a living trust allows you to control the distribution of your assets. If any of your beneficiaries are minors, for example, you can create a trust within your living trust. You can also decide when these beneficiaries will have access to their inheritance, either at the age of majority or at an age when you believe they’ll be able to properly manage the assets.
Another advantage to a living trust is that it sets up the mechanism for someone else to manage your finances should you become incapacitated. Without a living trust, your family members or others would have to petition the courts to appoint a conservator to manage your finances. In creating a living trust, you name a successor trustee who will take over if and when you become incapacitated, without having to involve the courts. The same successor trustee will manage the trust upon your death.
There are multiple variations of revocable living trusts. A wills and trusts attorney can help you choose the best option for your specific situation and draft a trust agreement that achieves optimal management and distribution of your estate.
At the Law Office of Maurice J. Verrillo, P.C., we have wide experience in trust and estate matters. A family-focused, Christian law firm based in Rochester, New York, we’re committed to advancing our clients’ best interests. Call us at 585-563-1134 or contact us online to schedule a free consultation.