• 15
  • September
    2011

Have you planned the administration of your estate? There are many methods and strategies for end-of-life planning, and you should not wait to plan your estate until your elder years. Many families are struck by tragedy in the form of deaths or serious illnesses long before they expected. Estate planning tools can be used at any point in your life to protect you and your family from the unexpected, and to protect your assets.

You have probably heard the term "living trust," but many people assume that setting up a trust is something only "rich people" need to do. The fact is, most people could probably benefit from setting up one a trust for one purpose or another.

For example, a revocable living trust can be set up to specify how your property is to be managed during your lifetime and distributed upon your death. The "living" portion of its title means the trust is established during your life. The "revocable" term indicates the flexibility of the trust. It can be changed, amended or even cancelled until the creator of the trust dies or becomes incapacitated, at which point the trust typically becomes irrevocable.

When you create a trust, whatever property you include in the trust is no longer part of your estate -- it legally belongs to the trust. That means that your family can avoid probate, at least for the trust assets. If you leave your property to your beneficiaries by a will, on the other hand, your loved ones will need to go through probate.

Another important factor for many people is that once a will enters probate, it becomes a public record. The probate system will distribute assets in the will, enforce the terms of the will and oversee the entire process.

A living trust, by contrast, stays private and avoids the cost and time of probate. Living trusts can also protect you in the event you become incapacitated, because you will have a system in place to manage essential assets that you do not (necessarily) personally need to control. In the same way, a trust can manage assets for children or disabled adults who cannot manage money themselves.

There is no estate plan that works for all families. Often, consulting an expert can be the best way to develop an estate plan that fits the needs of your family and protects your assets for the long term.

Source: Miami Herald, "Trusts can offer families benefits, discretion," Laura Isensee, Sept. 10, 2011