What You Should Know About Living Trusts

A living trust is similar to a will, but it can be active even while you are still alive. In the living trust, you will be able to give instructions on what to do with your assets, how to handle your finances, and who should be the guardian of your children. The main difference is that if you become incapacitated, such as from a coma or severe mental illness, the living trust goes into effect then. With a will, it only goes into effect after you pass. Here are some things to know about a living trust, including why it can be beneficial for your family.

Living Trusts Are Best For People With Complicated Situations

One thing you should know about this type of legal document is that it isn't necessarily appropriate for everyone. If you have simplified finances and basic assets, you might not need one, and will instead be fine with a will. However, if you tend to have some unique circumstances or complicated finances, it is a good idea. For example, if you have a blended family, your relatives might not know how to handle your assets with everyone that is close to you. It is also good if you have a lot of business interests or if you own property in other states or countries.

Your Loved Ones Can Avoid Probate

Nobody wants to go through the probate process as it is long and exhausting for everyone involved. In probate, all of your estate and assets have to go through the court in order to figure out who everything is distributed to. You can help your loved ones avoid the long process by instead having a living trust. Your lawyer will inform your loved ones of your wishes if you become incapacitated, helping to avoid this probate process altogether.

Living Trusts Are Private Documents

If you care a lot about your privacy, you might want a living trust instead of a will. There are certain situations where a will can be made public to others, even when you don't want others to know what is included in it until you pass. However, a living trust should be a completely private legal document that only you and your lawyer know about. This is good if you believe your family might have disagreements about what you have included in the trust. They will not be able to fight it since they won't know about it until you pass or you are incapacitated.

Speak to an estate lawyer if you want to find out more about having a living trust created.