A living trust may be the best option for some people, but it isn't the best option for everyone. This article takes a look at some of the most common problems with living trusts.
First, it's important to know that a living trust is different from a living will. There are two different things here, and you shouldn't mix them up. A living trust is a legal document that makes sure a person's property is divided up the way they want after they die. It can also be used to talk about things like minor children and who the person who died wants to be their guardian.
A living will, on the other hand, is a legal document that spells out exactly what kind of medical care a person wants or doesn't want if they get sick or hurt and can't speak for themselves.
When you use a living trust, you actually give the trust ownership of the things you own. Then, you choose someone to be the trustee. The trustee is in charge of running the trust. The trustee could be a family member, a friend, an attorney, or a business like a law firm.
With a living trust, you can keep your family and others from having to deal with problems that could come up after you die. Probate is the main thing that it can help with. A living trust doesn't have to go through probate court because your assets are no longer yours; they belong to the trust. Probate will only apply to things that are still in your name. But if you don't want your family to have to go through probate, you have to make sure that all of your property has been moved from your name into the trust. If you don't do this, the living trust won't work and the state will decide how your property is split up. If there are young children involved, the state will decide who will take care of them.
If you want to use a living trust, you should be very careful about who you work with. There are some companies that will gladly take your money in exchange for "do-it-yourself" kits that are almost useless when you need them. The best way to set up a living trust is to work with a good lawyer. In fact, some states will not let a living trust be legal if it is not handled by a lawyer.
You should also know that if you don't write your living trust well, it could cost your loved ones more money than they want or can spend. It is very important that you take the time to set up your living trust correctly and move your assets into the trust as needed. No one wants to think about their own death, but no one also wants to make the lives of those left behind too hard. This is especially important if you have young children who will need a guardian if you can't take care of them yourself.
