A living trust is an excellent way to protect your assets and avoid the unnecessary and stressful consequences of probate.
Many people establish revocable living trusts to which they transfer most of their assets. They are entitled to the income of the trust and the principal, if needed. Usually they reserve the right to change or revoke the trust during their life. Often, the person who creates the trust serves as the initial trustee, and provides for a successor trustee in the event of incapacity.
A living trust offers several important benefits:
- Privacy, unlike a probated will which can become a public document
- Protection of your assets from avoiding the probate process
- Disposition of real estate, especially if located in another state
Avoiding probate is one of the most valuable benefits of establishing a trust. Probate can be a lengthy, expensive, public and emotional process causing hardship and stress for family and loved ones. Placing assets into a revocable living trust allows the owner to maintain control while alive, and bypass probate once s/he passes.
It is important to mention that there is a cost to establish and maintain a living trust. In addition, a trust does not eliminate the need for a will, and it will not reduce your income or estate taxes.
Some people establish a living trust but never get around to transferring assets to it, in which case the trust is an empty shell. Be sure to fund your trust, and use your will to dispose of assets not transferred to the trust. Remember that a disposition of assets through your living trust is equivalent to a bequest in a will.
If you already have a living trust, and you would like to include the Christian Brothers of the Midwest in your plans, you may be able to draft an amendment to your trust. If you are in process of creating a living trust, you may, of course, include a charitable contribution. Like a charitable bequest in a will, your gift can be unrestricted, for a designated purpose, or to create an endowment.
