Living Trusts are something you may have heard of but don’t know much about, or they are something you’re considering using to your advantage, either way, here’s a breakdown of what a living trust is and why you might be able to use a Living Trust to your advantage.
Living Trust Explained
Living Trusts are designed to help protect your assets during your lifetime whilst giving you the certainty that your estate can be passed on in its entirety to your beneficiaries once you’ve died. Though this may not sound that dissimilar from a Will to you at this stage, and you’d be right, they are laid out in a very similar way to a Will. You do lay out what you want to happen to your estate in the same way as you would for a Will in a Living trust.
Yet there is a difference between the two in the implementation of each. A Will only comes into effect once you have died and probate has been granted. A Living Trust comes into effect before you die. This can be immediately, or it can be when certain conditions are met that it comes into effect.
Your assets like any property, any investments, your money, are placed into the trust, and when the Living Trust comes into effect, the assets are placed into the hands of chosen Trustees for the Living Will. You are still able to live in your home, and you can be paid a dividend out of the Living Will that you set to cover living expenses.
This kind of arrangement can be extremely beneficial for not only yourself but also your beneficiaries.
The Benefits of a Living Trust
To begin with, a Living Trust allows the process of probate to be bypassed by your estate when you die. The disadvantage of this is that probate can be an extremely time-consuming process, often taking anywhere from six months to years to be completed. Without having to apply for probate or get a Grant from the court, the Living Trust can be executed immediately, allowing your beneficiaries to receive their inheritance without delay.
Though, depending on the terms of the Living Trust, your beneficiaries don’t even have to wait until you are dead in order to receive their inheritance. They can receive it before your death, meaning that you will be able to see your beneficiaries benefiting from your estate, and remove any fears that people are sitting around waiting for you to die.
To put this another way, you get to dictate the terms of the trust when the beneficiaries receive their inheritance. This can be early or a set time period after you have died, i.e. when a grandchild goes to university they receive their inheritance, or someone turns 18 they receive their share of the estate.
The Trustees powers are also limited by what powers you decide to give them. Even if you develop a disease such as dementia or Alzheimer’s, you have already made all provision for your family and yourself with trustees to manage it all on your behalf. Nobody can make changes to your provisions meaning that you maintain complete control.
Finally, if you were to remarry, your Trust would still ensure that your assets went to your original beneficiaries, not your new spouse, giving your beneficiaries peace of mind.
Call our experts today to help you set up a Living Trust now.
