Living Trust FAQ

No one enjoys contemplating their own death, but planning ahead for that eventuality can give you the peace of mind you need to fully enjoy your life with your loved ones. Most financial experts agree that creating a living trust is the best way to protect your property and assets as an important part of estate planning.

If you are considering creating a living trust, you may have some common questions about the purpose and process of taking this decisive step forward toward the future.

What are the Benefits of a Living Trust?

Putting your assets into a revocable living trust allows you to retain full access to them in a trust that holds those assets for your named beneficiaries after your death. By placing assets in a living trust, they avoid the lengthy and complex probate process after your passing. A living trust allows you to make changes or even completely cancel the trust at any time, so you retain total control of your assets while also protecting them for your future beneficiaries.

A trust avoids probate by allowing an assigned accessor trustee to directly distribute the assets to the beneficiaries without court intervention. The beneficiaries receive the property and assets quickly and without taking legal expenses from the estate—as much as 5% in most states.

Your appointed trustee also takes control of the trust in the event you become incapacitated.

What Property Can I Put Into a Living Trust?

There are many assets you can transfer into your living trust, including the following:

• Real estate property
• Bank accounts, including savings and checking
• Money market accounts
• Mutual funds and brokerage accounts
• Stocks, bonds, and investment accounts
• Certificates of deposit
• Safe deposit boxes
• Life insurance policies
• LLCs
• Cryptocurrency
• Personal property such as antiques, collectibles, heirlooms, and artwork

Is There Anything I Cannot Put Into My Living Trust?

Financial advisors rarely recommend placing your pension or retirement account into a living trust. In most cases, this is treated as cashing out your policy which triggers taxation and penalties that substantially lower the value of the account. 

You cannot place foreign assets or cash into a living trust.

Does a Living Trust Protect My Estate From Creditors?

No. After your death, creditors may file lawsuits against the trust to settle debts just as they can while you’re living. In most cases, they file claims against real estate property because its transfer is a matter of public record while other assets in a trust aren’t made public because they avoid probate.

How Do I Choose a Trustee?

For those who are young, healthy, and not incapacitated in any way, it’s best to simply choose yourself as a trustee. This keeps all control in your own hands during your lifetime. To do so, you must choose a successor trustee to take control of distributing your assets according to your wishes after you die or in the event you become incapacitated. In the event you are struggling to choose a trustee, contact our family law attorneys at The Law Offices of Stephen Vertucci to learn more and help you with making your decisions.

Do I Still Need a Will if I Have a Living Trust?

A living trust is an important part of an estate plan, but in most cases, it’s still beneficial to create a last will and testament. Your will protects assets you didn’t put into the trust or were unable to place in trust. A will helps reinforce the trust by making your wishes clear for your property and personal possessions.

The living trust protects your privacy by avoiding probate court while the contents of a will go through the public process of probate.