- posted: Mar. 30, 2020
Most people know that a will is an essential element in an estate plan, but there are other instruments worth considering. Living trusts can help you accomplish different goals for your assets and their distribution while offering benefits to the trust creator and beneficiaries.
Living trusts can be revocable or irrevocable. A revocable trust is one where the creator of the trust retains the right to change the trust or revoke it without anyone else’s approval. Creators usually name themselves trustees, so they have use of the trust during their lifetime. An irrevocable trust cannot be changed once it has been signed unless all the beneficiaries approve. Irrevocable living trusts are less common because they restrict access to the trust’s assets.
Drafted to fit a client’s individual needs, living trusts can accomplish any number of goals. These are just a few reasons to consider a living trust:
- Avoid probate — Without a trust, your heirs usually must go through the often time-consuming and sometimes expensive probate process, which can decrease the value of your estate. Property placed in a living trust, however, avoids probate because it will be distributed by the trustee according to the terms of the trust, without probate court involvement. This means faster distribution at no added cost.
- Protect privacy — Probate is a matter of public record, so anyone can search to find out about an estate’s value and distributions. If you only have a will, for example, everything in it eventually becomes public because wills go through probate. Living trusts do not get probated, so your privacy is protected.
- Protect children, both minor and adult — A living trust can specify how much of your property your minor children should receive and at what age, allowing you to wait until they are older before giving it to them. Also, if you have an adult child whose financial management skills are suspect, your trust can direct only certain portions to be distributed to him or her as needed.
- Plan for incapacity — If you are the trustee of your living trust, you’ll need to name a successor trustee. If you become incapacitated in the future, the successor trustee will step in and manage the trust for your benefit. This is beneficial to those who are single and don’t have any children who could make decisions for them.
Perhaps because South Dakota offers these benefits to trust creators and does not impose an estate tax on trust funds, our state has been named a top-tiered trust jurisdiction by the journal Trust & Estates. If you are interested in protecting your assets through a living trust, our firm is ready to help.
At Anker Law Group, our lawyers assist South Dakotans in a range of estate planning matters, including trusts. To schedule a free consultation at our Rapid City office, please call 605-519-5967 or contact us online.
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