Imagine working hard all of your life to secure assets that helped to provide financial stability for you and those you love most. Only, after you pass away, everything you work for gets taken from those you meant it for. Though no one likes to think about death, it’s a reality that needs to be considered and planned for – sooner rather than later. Skipping this part of the financial and/or estate planning process leaves your loved ones in a mess that can take years and a lot of money to get out of.
While you’re living, you have the power to create protections such as living trusts to secure your assets and the futures of those you’ve left behind. A living trust is essentially a legal document that is created while you’re living to protect your assets. It allows you to manage these assets until which time you should pass away and then the assets are distributed to the beneficiaries without the complicated, time-consuming, and expensive probate process.
Types of Living Trusts
There are several kinds of trusts available to protect you, your assets, and your loved ones. A revocable trust is one in which you are named the trustee and have the power to manage the assets as you see fit until the time you pass. At any time you want to change the assets, details in the trust, or trustee, you may do so. An irrevocable trust is similar to a revocable trust, expect the details within cannot be changed. An asset protection trust prevents creditors from being able to collect or make an attempt to collect past debts from the assets listed within the trust. Lastly, charitable trusts are legal documents designed to a provide proceeds from the trust holder’s assets to the charities of their choice. You can work with trust attorneys in San Diego or whichever city you live in to determine which trust is right for you and how to get started.
Reasons to Have a Living Trust
Now that you have a better understanding of what living trusts are, let’s take a closer look at why it would be to your advantage to add this to your financial and estate planning:
It might be easier to allow “someone else” to handle your affairs after you’ve passed on, but the truth is, that “someone else” is likely going to be the legal system. When the courts get involved in your final affairs, it can leave a lot of stress and turmoil for those you love most. That’s why, as you’re doing your financial planning, it is strongly advised that you do your due diligence and develop legal documents like trusts that keep all you’ve worked for and all you love safe.