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Living Trusts: Calculating the Benefits

Chances are, you've already heard a lot about the attributes of Living Trusts: avoiding probate and legal quagmires, sometimes lowering estate and/or income taxes and protecting privacy. Yet it's also important to receive solid estate planning guidance before making final decisions, and to carefully weigh the benefits and potential drawbacks.

WHY CHOOSE A LIVING TRUST?

The desire to ensure that an heir is provided for materially is the most common reason for creating a Living Trust. In the case of minors, a trust allows a parent to provide for a child without giving the child control over the property. The parent can also mandate how the property is to be distributed and for what purposes.

A trust is also a useful tool for taking care of heirs who have mental impairments or lack investment experience. The trust document can establish that all money is controlled by a trustee with sound investment experience and judgment. Likewise, a trust preserves the integrity of funds when the recipient has a history of extravagance. It can protect the property from an heir's spendthrift nature as well as from his or her creditors.

This is also true of persons who may feel pressure from friends, con artists, financial advisors and others who want a slice of the pie. A Living Trust can make it extremely difficult for a recipient to direct property to one of these uses.

A "spendthrift" provision in a Living Trust is often used to further preserve the integrity of assets. It prohibits the heir from transferring his or her interest and also bars creditors from reaching into the trust. Living Trusts are relatively easy to update, modify or revoke in most cases.

Click below to learn more about Living Trusts from the following sections:

  • SHORT-CIRCUITING THE ORDEAL OF PROBATE
  • MAINTAINING CONTROL
  • MANAGING ASSETS, EASING TAX BURDENS
  • ARE THERE DISADVANTAGES TO A LIVING TRUST?

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This Report is Compliments of Larry Howell, Attorney at Law . If you would like a hardcopy of this report please email larry@howell-law.com or call (770) 442-8921 .

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