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Video: Palm Desert Estate Planning, Wills, and Living Trusts--Living Trust Benefits
What about a Living Trust? Well, first of all, what is a living trust? A living trust is a revocable legal document. Revocable is a fancy term for just being able to change your mind. You can take it back you can do whatever you want during your life. A revocable living trust allows you to be able to manage your assets while you are alive. The living trust transfers the management of your assets quickly and easily to your successors and, if done correctly, it can completely avoid the troubles, stresses, and costs associated with probate court.
During life, you continue to manage your assets as you always have within the living trust. Then after your lifetime those assets are quickly transferred to the people or charitable organizations you have selected to receive those assets. As a result, as is the case where there is no estate plan in place, the courts and the State of California do not select who will receive these assets if you have a properly executed living trust in place.
Here are the primary benefits of a living trust:
The number one benefit of a living trust is that you bypass probate court. In fact, this is the greatest benefit of a living trust. Even as attorneys, we do not like going to court-why would you want your family to have to suffer this traumatic event? A living trust will save your family from this painful experience.
Second, it helps you control and steer the distribution of your estate assets because you are deciding where these assets go in advance and, again, this is not decided by the state or the probate court.
It also keeps your family information private. This is another enormous benefit of a living trust. A living trust is not filed or recorded with the state or the county. So, it is not seen by any of these government institutions during life and even after death, if properly executed. It is completely private and between you and whoever you wish to share it with. Well, some information you will have share with your financial institutions but not all of it, especially with a certificate of trust.
A good living trust is going to help you minimize your estate expenditures as it streamlines the distribution process and less is paid to third parties who will have to be involved if your assets are probated.
There are also considerable tax benefits as well. You don’t have the potential gift taxes as the assets are titled in the living trust and not as joint tenants, etc. Your capital gains taxes and estate taxes are also minimized.
Finally, a good living trust ensures peace of mind. You know family and friends are cared for because you have a living trust in place. If you pass away with a joint tenancy arrangement, you have no opportunity to take care of your friends or charities in addition to family members.