Living Trust Lawyers in Lenoir County Helping Clients Protect Their Assets
As you begin planning your estate, you may consider creating a living trust to hold your assets and properties. A living trust lets you manage and maintain trust assets while you are still alive and set guidelines for how those assets are handled after you pass. There are many other advantages of living trusts that could benefit your estate, including avoiding probate and reducing your tax liability.
If you are considering creating a living trust, consult a living trust attorney today. Our team at Swindell Law Firm, PC, will review your finances and make legal suggestions based on your unique situation. Don’t leave your legacy up to chance. Contact our office today by calling 252-262-1325.
What is a Living Trust?
A living trust is a legal document established by the creator of the trust, also called the grantor. The grantor puts assets and properties into the trust and assigns a trustee to manage those assets. The legal document lays out any rules and provisions that pertain to the trust, which is why it’s essential to work with a living trust lawyer when drafting a trust document. Once the living trust has been established, the grantor will assign beneficiaries to receive benefits from the trust after the grantor’s death.
Any assets in the living trust are considered trust property, meaning the grantor is no longer the owner of these assets. Real estate, personal property, and business interests are just some of the assets that can be included in a living trust.
Other assets that can be included in a living trust are as follows:
- Stocks and bonds
- Checkings and savings accounts
- Life insurance policies
- Mutual fund accounts
- Brokerage accounts
- Money market accounts
What Are the Different Types of Living Trusts?
There are two main types of living trusts that individuals can choose from. A revocable trust is much more common than an irrevocable living trust; however, our team can help you decide which one to choose based on your unique circumstances.
Below are the main differences between the two types of trusts:
Revocable Living Trusts
In a revocable living trust, the grantor maintains control over the assets they have transferred into the trust. They can also change the trust rules or modify named beneficiaries if they wish to do so. Grantors can remove assets, change trustees, or revoke the trust at any point. Because of this, the grantor must still pay taxes on any assets in the trust while they are still alive.
Many individuals use a revocable trust to protect their assets if they fall ill or become incapacitated. If this happens, the successor trustee will have the power to make decisions about the trust. Most revocable trusts become irrevocable after the grantor passes away.
Irrevocable Living Trusts
In an irrevocable trust, the assets in the trust are owned by the trust itself, not by the grantor. The grantor also cannot name themselves as the trustee. After an irrevocable trust is created, the trustee essentially becomes the legal owner of the assets.
In most cases, irrevocable living trusts cannot be changed or amended, barring extreme circumstances. Because of this, the assets in an irrevocable living trust are protected from creditors and lawsuits. Similarly, because the grantor no longer owns those assets, an irrevocable trust can reduce the tax liability of an estate.
What Are the Benefits of a Living Trust?
Many people establish a living trust because of its benefits to an estate plan. A revocable living trust, in particular, is a popular choice because it allows the grantor to maintain control of their assets.
Other benefits of a living trust include:
- Helps family members avoid probate after the grantor’s death
- Assigns a successor trustee to manage assets in case the grantor becomes incapacitated
- Keeps information about your estate private
How Do You Create a Living Trust?
Before creating a living trust, it is essential to consult with a living trust attorney. Because everyone’s estate is different, the process of setting up your living trust may differ slightly from someone else’s. However, there are some general steps that must be taken to establish a living trust.
Below is an outline of how to create a living trust:
- Choose between a revocable and irrevocable trust. If you need guidance on which one to choose, contact our office for legal advice.
- Name the beneficiaries of the trust.
- Assign a trustee to handle the administration of the trust.
- Review and sign the living trust document with your living trust attorney present.
- Transfer property and assets into the trust.
What’s the Difference Between a Living Trust and a Will?
Because living trusts and wills both involve the distribution of assets after one’s passing, they are often conflated. However, a living trust and a will are different enough that you may choose one over the other. The main difference is that a living trust does not go through the probate process, while a will does. During probate, the court will examine an individual’s will to ensure it is lawful and accurate. The court may also value any assets included and ensure that all estate debts are paid. The probate process takes an average of four months to complete and tends to delay asset distribution to family members.
Should I Hire a Living Trust Lawyer?
A living trust can be an excellent estate planning tool to reduce tax liability and avoid the probate process. If you are considering creating a living trust, an experienced attorney can assist you by examining your assets and making legal recommendations based on your financial goals. Our team at Swindell Law Firm, PC, has years of experience in the estate planning industry, and we are confident we can help you create a living trust that meets your needs. Call our office today at 252-262-1325 for a free consultation.