Estate planning is very multifaceted. When working with a professional to develop plans for the preservation and distribution of your estate, you'll want to research an array of options. Those options include a will, although if that is the only one used, probate complications can ensue. Another good option is a living trust.
A living trust combines the facets of a will and the facets of financial power of attorney into one document. Additionally, it can be a way to manage assets both when you're alive and after you leave your assets to your heirs. That combination of features is making it a popular tool for people of all ages doing estate planning.
A living trust isn't meant to simply be a tax haven or uncomplicate estate matters with the IRS. Applicable taxes on your estate will need to be paid in accordance with how it is structured and in compliance with tax law. However, a living trust does have advantages.
One is that it's a way to set a certain amount of funds aside. Additionally, you still get to make the decisions about how the money is managed, meaning that the control of that money stays in your hands.
Also, assets in a trust won't be subjected to probate, so you can avoid lengthy court proceedings and excessive publicity of the estate. Correspondingly, the estate is spared the settlement costs of court battles, which could otherwise take 5 percent or more of its total value.
A living trust is certainly worth considering. To learn about them in detail and how they can work for your estate, contact an attorney who specializes in estate planning.
Source: Fool, "The Truth About Living Trusts" Dayana Yochim, Nov. 30, 2014