On this episode of our series digging deeper into the different parts of an estate plan, we’re discussing living (also called revocable) trusts. Shannon McNulty, NY attorney shares with us what a trust is, why you would want to set one up (and why it generally always makes sense for parents of young children), and some of the nuances to be aware of when it comes to living trusts.
Bypassing probate
Creating a living trust is just one step of the process when it comes to setting up a trust. You also need to fund the trust, which means that you transfer funds to the trust or leave assets to the trust through a beneficiary designation. By funding your living trust, you can avoid probate for these assets which means that you’re not slowed down by having to go through the court process. This is important when you have young children and ongoing expenses; by bypassing probate, the assets can be used as you intend and in a more timely manner than if you have to go through probate. Bypassing probate makes things easier for your loved ones in the event of your passing.
Know your local guidelines
As you consider if a living trust is right for you, you’ll want to look into your state and county guidelines and information to help determine if it is worth it to spend the money setting up your trust. For example, in California, where probate and related fees are notoriously high, it makes sense to create a living trust.
Talk with a lawyer in your area to determine what’s best for you. On the episode we dig deep into revocable or living trusts, but there are other trusts parents may want to be aware of. We’ll share more insight into those in upcoming episodes, and for many parents, the living trust is the place to start.
Resources mentioned
Check out the pros and cons of a living trust
Learn more about Special Needs Trusts
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Learn more about McNulty Law