Living trusts are some of the most popular types of trusts used by a grantor or the person who creates them to accomplish estate planning goals. There are many different advantages associated with living trusts including privacy during situations in which the state demands an inventory of asset filing, easy succession of trustees, the elimination of delays associated with probate, end of life provisions as desired by the grantor and protection against incapacity of the beneficiaries or the grantors.
However, before deciding whether or not a living trust is right for you, you’ll want to discuss any concerns you have with your estate planning attorney in your area. Living trusts do have a few different limitations to be aware of, including the titling of property. Certain types of real estate property, for example, should be included from a trust depending on your location.
Creditor claims are important to consider since most living trusts do not provide protection from claims that are made by creditors since the grantor of the trust is considered to also be the owner of the trust assets, thereby keeping a close enough connection in ownership that a creditor could make a claim against assets inside it.
Finally, there are tax implications for living trusts such that all income earned by the trust is taxable to the grantor’s personal tax return as if the property had never been transferred to the trust. To learn more about some of the pros and cons of using living trusts or other tools, set up a time to speak with an estate planning lawyer.