A living trust can be a significant legal tool in estate planning to facilitate the smooth transfer of assets after the grantor’s death. This legal arrangement is established during the grantor’s lifetime, with assets being transferred to the trust and managed by a trustee, ensuring a designated beneficiary receives their share upon the grantor’s passing.
Distinguishing between Revocable Living Trusts (RLTs) and Irrevocable Trusts, RLTs offer flexibility during the grantor’s lifetime, allowing modifications, but may provide limited asset protection and could be subject to estate taxes. Despite these considerations, RLTs are popular due to the retained control over assets.
Setting up a living trust involves key steps, starting with identifying the assets for transfer. Mortgage-related concerns should be considered, especially when transferring real property. While the grantor often serves as the primary trustee, designating a successor trustee is crucial for effective asset management in the event of the grantor’s incapacity or death.
The selection of beneficiaries, who benefit during the grantor’s lifetime and inherit assets later, is a significant decision. This may include close family members or charitable organizations. Overall, the creation and execution of a living trust require careful consideration. Contact us for guidance on living trusts and overall planning.
