Living trusts allow you to transfer property to a trust so the trust owns the property instead of you. You name a trustee to manage the property, which can usually be you or another trusted individual or organization, such as a bank or trust company. You also name beneficiaries, which may be you during your lifetime. The trust is managed for the benefit of the beneficiaries. Living trusts can be revocable or irrevocable. Revocable trusts can be changed and irrevocable trusts generally cannot. The Kansas Bar Association indicates many people who create living trusts make them revocable, unless the trust is for a specific purpose for which irrevocability is required.
Living trusts are an important estate planning tool, but many people are uncertain about exactly what a living trust can, and cannot, do. It is important to understand the process of creating a living trust as well as determining whether the living trust will provide you with the asset protection and other benefits you are hoping to achieve through its creation.
What Do Living Trusts Do?
Because there are different kinds of trusts, you need to be sure the living trust will do the things you expect it to do before you create a particular type of trust. Some things a living trust can do for you include the following:
- A living trust can serve as a standby trust. You can create a living trust and transfer your property into it right away. However, you can also create a living trust to serve as a standby trust and have property transferred into the trust only if you become incapacitated or die.
- A living trust can protect your assets in case of incapacity. A living trust is an alternative approach to a power of attorney for ensuring your assets are appropriately managed if you become incapacitated and unable to take care of your own affairs. When you create a living trust, you can opt to be the trustee for as long as you remain of sound mind. If you become incapacitated and unable to make choices or communicate your wishes, you need to have a backup trustee to immediately take control and begin to manage your property and assets when you are no longer able to do it.
- A living trust can avoid probate. Your heirs will not have to go to probate court and probate your will to get access to the assets kept in a living trust. If a living trust is your only estate planning tool, probate may still be required for the transfer of assets not owned by the trust. The ability to transfer assets immediately is important so heirs do not have to wait and so property can be managed effectively by those who stand to inherit. When property is owned in different states and probate in those different states would otherwise be necessary, the use of a living trust to avoid multi-state probates is a significant benefit.
- Asset protection. A living trust generally does not protect your assets from your creditors, but you can take steps to create a trust that will ensure your heirs do not lose their inheritance due to a divorce or creditors problems.
These are just some ways in which a living trust can give you more control, help you protect your assets and provide for heirs. An Overland Park estate planning lawyer can explain other benefits and functions of a living trust, as well as some of the limitations you can expect when you create this type of trust and transfer ownership.
How Can an Overland Park Estate Planning Lawyer Help With Living Trusts?
Parman & Easterday has extensive experience providing assistance to clients who want to create a revocable or irrevocable living trust. We understand the laws associated with living trusts in Kansas and Oklahoma, and we understand how the federal government treats living trusts. We can advise you on whether a living trust should be part of your asset protection and estate plan and offer you guidance on all your alternatives.
To learn more about what a living trust is or how to create one, join us for a free seminar. You can also give us a call at (913) 385-9400 or (405)-843-6100 or contact us online to speak with an Overland Park living trusts lawyer who can work with you on creating a personalized plan that meets your needs.