Estate planning can be as complex or simple as a person wants. When you hold significant financial assets, it’s essential to outline your wishes clearly in your will. Establishing a living trust, also known as a revocable trust, and funding it with specific assets makes it easier to hold and protect these assets during your lifetime and clearly direct the distribution of the assets to designated beneficiaries after your death.
1. Maintain Control
Anyone with assets over $100,000, minor children, or concerns about how difficult probate will be for their loved ones after their death often find great value in a living trust. There are many matters to consider when it comes to establishing a living trust and whether it’s right for your unique circumstances. The biggest concern, for most, is being able to have a voice in the transfer of specific assets to chosen beneficiaries after your death. Your assets, designated beneficiaries, and wishes remain in your control with the power to change them at any time.
2. Enjoy Flexibility
A living trust is a flexible document in an estate plan. If you have a range of complex and changing investment accounts, as well as multiple homes, extensive assets, or multiple heirs from multiple marriages, this estate planning tool protects your assets while still allowing you to use the assets. You can change a living trust and keep the original document active through a trust amendment.
3. Understand Limitations
Depending on the type of asset in question, some items can be included in a living trust and some cannot. Retirement assets like IRAs and 401ks cannot be included, nor can motor vehicles, health savings account balances, or foreign investments. Assets that can be placed in a living trust include jewelry, real estate, business interests, financial accounts, artwork, antiques, or other personal property. Thankfully, estate planning is broad, and everything you want to have accounted for can be included in the right type of documentation through the advice and guidance of an experienced financial planner.
4. Appreciate Privacy
Probate is an open process that is part of the public record. While all wills go through probate, not all assets must. With a living trust, you are guaranteed privacy for your assets and your family after your death. In fact, some people prefer a living trust to a last will and testament entirely because a trust can minimize risk or prevent a complex, lengthy, and costly probate process. No one can search the public record to learn about your assets or how they were distributed through your trust. Knowing a revocable trust is in place protects your estate and the ones you love.
Plan Your Living Trust with a Financial Advisor
At Hollander Lone Maxbauer in Southfield, MI, our financial advisors are well-versed in the matters of financial planning when it comes to estate matters. Schedule a consultation with a financial expert to learn more about living trusts, review your current financial standing, and discuss future goals and final wishes to protect yourself now and your beneficiaries later.