This is an article from Parman & Easterday (https://www.parmanlaw.com/) in Oklahoma City, Oklahoma, that we thought others may find helpful.
Living trust attorneys help you determine if you need a trust and provide guidance on the type of trust that works best for your specific situation. They can work closely with you to discuss your estate planning goals and create an effective trust that will efficiently achieve your goals.
Your reasons for creating a trust are unique, so there is no substitute for personalized legal advice when it comes to something as important as the use of trusts in your asset protection plan, incapacity plan, or legacy plan. However, there are a few common reasons that people benefit from a living trust. Below are five of those reasons:
1) A Living Trust Provides Flexibility
When you set up a living trust, you can name yourself as the trustee and if it is revocable, continue to retain control over the wealth that you transferred to the trust. You can also modify or revoke the trust (in part or in whole) at any time. These features are what make a living trust distinguishable from an irrevocable trust. However, they can also be considered a downside, because your high levels of continuing control over trust assets do not give you the same asset protections that other types of trusts do.
2) A Living Trust Provides Protection in Case of Incapacity
If you become incapacitated and you haven’t used the proper legal tools to prepare, your family could be forced to initiate court proceedings to name a guardian or conservator. This process takes time. During that period, proper management of your assets can become an issue. If not, the court could then appoint a person to serve as a conservator. You may have strong objections about that person’s trustworthiness or their ability to manage assets. The good news is that situations like this can be avoided by creating a living trust, transferring trust assets into it, and giving a responsible backup trustee the authority to manage the trust assets, should you become incapacitated.
However, it is important to note that because of the continued control you retain over assets in a revocable living trust, any assets held within the trust will typically be a countable asset in determining your eligibility for means-tested Medicaid. This means that if you are incapacitated and need nursing home care, you may be ineligible for Medicaid coverage and forced to pay for nursing home care out of pocket unless you have an optional long-term care insurance policy.
3) A Living Trust Allows for the Fast and Efficient Transfer of Assets
The probate process (the process by which most assets transfer after a death) can take a year or longer, according to Investopedia. This may seem like a very long time when loved ones are waiting for an inheritance — especially if they were counting on the inheritance to provide for them once you are no longer there to provide.
4) A Living Trust Can Help to Save On Costs
The costs of probate can total anywhere from three to seven percent of the estate, as Investopedia explains. This means that it could cost a lot for a will to be probated. You can avoid these unnecessary expenses by creating a living trust that allows assets to be transferred through the trust administration process instead of probate.
5) A Living Trust Can Help Keep Your Financial Affairs Private
When your will goes through probate, your financial affairs and any inheritance left to family and friends become available to the public, which most families find undesirable. When assets transfer through the trust administration process, there is no need to worry about your personal finances becoming court or public record, because the trust administration process takes place outside of court unless some type of problem arises.
Getting Help from Living Trust Attorneys
Living trust attorneys can assist you in determining if any of these examples apply to your situation. They can also help you explore other reasons to create a living trust or even create another type of trust that may work even better for you.