A will is often an individual’s first estate planning tool, but it should not be the only item on your planning to-do list. Everyone’s situation is unique, and a final decision about whether you need a living trust should be the result of consultation with your legal and financial advisors and your loved ones; however, this article summarizes a few key items for you to know.
- What is a living trust? A trust is a written document that involves you, the Grantor; the Trustee, who manages the trust assets in a fiduciary capacity; and the Beneficiaries, who will benefit now or later from the trust. A “living” trust is created during the Grantor’s lifetime and may be revocable, which means you retain full control over the trust terms and trust property during your competent lifetime. Typically, the Grantor is also the initial Trustee.
- What is the purpose of a revocable living trust? A living trust may provide you with the peace of mind that comes from knowing that your assets and your heirs will be protected via your bloodline, eliminate the need for your estate to pass through a public and potentially expensive probate process, allow for your assets to pass to your Beneficiaries immediately upon your death, and allow for your assets to be allocated to Beneficiaries in pre-designated amounts and time frames; i.e., to avoid a windfall to a Beneficiary at an early age.
- What are the differences between a will and a living trust? A will takes effect upon your death, is subject to a lengthy and potentially expensive probate process, and is more likely to be contested. A trust, if written properly, is effective the day you sign it, may avoid the probate process, and is far less likely to be contested.
- What do I have to put in a living trust? You may fund your trust with as little (at least $1) or as many assets as you choose. As the Trustee, you may fund, buy, sell, and/or use the trust assets just as you do today. Our clients typically fund their trusts with real estate, including their principal residence, investment assets such as stocks and mutual funds, and other tangible assets.
For assistance with creating a revocable living trust, or with any other legal needs related to your business or estate planning, contact Fournier Legal Services at firstname.lastname@example.org or 860.670.3535 now for a consultation and planning session.
Joseph E. Fournier is an Attorney and a CPA who has more than twenty years of experience in a variety of business legal matters, including start-ups and company formations, drafting shareholder and operating agreements, contracts, employment law, commercial litigation, tax planning and audit defense, and mergers and acquisitions (M&A). He also handles estate planning matters, such as business succession planning, wills, trusts, and probate.