Pike County Trusts Attorney
Trusts are a container in which assets can be held. For instance, those who are set financially for their retirement often put their IRA into a trust to be distributed upon their death. Others set up revocable or irrevocable living trusts that are distributed in accord with their wishes. Trusts give you more control over how your assets are distributed after you pass. The trustee, who manages the trust, sets up the account to be disbursed to heirs based on established commands that are set up by the trust’s holder (you). Ultimately, it is important to understand how trusts can be used as an estate planning tool and some of the benefits of using a trust in that way.
Revocable Living Trusts
Revocable living trusts are quite popular nowadays. While you’re alive, you still have ultimate control over the trust. You can put things in the trust or take them out at your discretion. You can also define the terms on which the assets within the trust are disbursed.
This is managed through the use of a trust document. The trust document is drafted by the trust maker (your attorney) and is ratified with a notary public as a witness. The trust document lists what property is held in the trust. It names the trustee and it establishes how the property is divided once you pass on.
While some property can simply be named in the trust, property that requires titles or deeds (like real estate) must be retitled in the name of the trust. In other words, the title is held by the trust/the trust owns the property.
Trusts Avoid Probate
Trusts avoid the probate process entirely, which under certain conditions, can be beneficial. The question you will have to ask yourself and discuss with your estate planning attorney is: Is it worth the added cost of setting up a trust to avoid probate? That, of course, is entirely dependant on your circumstances.
Probate is the court-supervised process of distributing your assets. Below, we’ll talk about some of the advantages of avoiding probate.
Advantages of Avoiding Probate
When your estate goes into probate, the first thing that happens is that your creditors are contacted. Any claims that they can make on your estate are extracted before your heirs see a dime of the money. In addition, court fees are extracted in the process of running your estate through probate. These can also put a major dent in what makes it to your heirs.
Trusts avoid the probate process altogether. While certain assets may not be safe from creditors, any creditor that wants to make a claim on your estate will have to initiate a lawsuit against the trust. Because probate is a matter of public record, creditors need only file notice with the court that they have a claim on the property. Trusts are not a matter of public record, though real estate transfers are. Creditors may not know what is held in the trust, but when real estate is transferred there will be some record of that.
Talk to a Pike County Trusts Attorney
If you’re interested in setting up a trust or drafting a will, contact the Pike County estate planning attorneys at Farley & Weed, LLC. We will help you go over your options and determine whether or not a trust will be useful to you.