Why do I need  a Living Trust?

Sometimes, living trusts are oversold, so a lot of people find themselves asking 'why do I need a living trust?' For anyone who needs a living trust, a living trust can be of great benefits. In order to establish if you need a living trust or not, first let's examine the ins and outs of living trusts. In general, a living trust provides asset protection for the person setting up the living trust.

How does a living trust work?

In a typical living trust, the husband and wife can either set up living trusts separately or they can set up a joint living trust. Each of them then transfers their assets into their own living trust if they set up separate living trusts.

What happens to a living trust when I die?

When one of them dies, the disposition of the assets in the living trust is controlled by the terms of the living trust. If the couple also has a will, the will does not govern the assets in the living trust. The assets in the living trust bypass probate. This is one of the advantages of setting up a living trust and is also the big difference between a living trust and a will.

Reasons why you might want to establish a living trust

• living trust assets avoid probate
• estate taxes savings
• a living trust can be revocable so you can cancel the living trust at any time
• help with liability protection
• Irrevocable living trusts can avoid probate and provide income tax benefits as well as eliminate estate taxes
• privacy - a trust is a private document and not available for public viewing unlike a will
• a living trust can go into effect immediately
• you can add assets into the living trust or take out any assets at will.