When considering end-of-life planning, very few of us relish the idea of our loved ones spending the days after our passing inside a courthouse, hashing out details of what goes to whom. This procedure is the matter of probate. Even with the proper preparation of a living trust or will, the probate courts maintain rules and timelines when it comes to paying off the debts and distributing the wealth. Without a will, it can become a lengthy and painful process of arguing over the estate. Many families have horror stories of ruptures that are not ever repaired after enduring this process.
The easiest way to avoid probate – and the courts potentially having a say over your estate – is through the creation of a living trust. And, the benefits of this method don’t end with bypassing the court system. A living trust provides the holder with the ability to modify distributions in real-time, while still living, and can even specify the conditions for any hospice care needs. The aspects of a living trust can be constructed in a way that relieves our loved ones of the burden of needing to decide what to do for us during some of the most difficult times in life. Read on to learn more about the ways that the creation of a living trust can benefit both you, and your family.
Avoid Conflict by Creating a Living Trust
As already mentioned, the execution of a will can become a battleground. As optimistic as we may be about the intentions and camaraderie of our loved ones, a death in the family has the tendency to bring out the worst in us. Even well-intentions can become distorted, as no one family member tends to see things in the same way as another.
Some of the most common disputes arise when the potential beneficiaries assert that our will was not crafted while we were of sound mind, or that we were coerced into signing it by a particularly greedy or manipulative family member. And, with a will, navigating these disputes will fall to the named executor, who will be taking center stage in the drama. This is not a good way to repay this loved one, who has obviously earned your respect through sound reasoning skills and impartiality. Creating your specifications within an ongoing, living, trust demonstrates – unequivocally – that you are, indeed, the one who is directing the contents, and creates better conditions for their distribution.
Relieving the Burden on Loved Ones
It is wonderful to have people around us that we can depend on to take care of matters. With a living trust, however, we have the ability to ensure that we are not overly burdening those good souls with our needs and desires. The time leading up to – and following – our passing best consists of our loved ones focusing on the celebration of our existence, and not on being tied down with legal, financial, and emotional concerns.
A living trust eliminates some of the hassles of being an executor, as the details of the account are handled by the named trustee. During our lifetime, we are able to name ourselves as the trustee, ensuring that we have the ability to manage our debts and assets at will. Following our passing, the tasks of a trustee involve distributing our assets or managing ongoing accounts. We can further assist the process by making sure that all of our account information is organized and compiled in a location that our trustee is easily able to access.
One of the biggest reliefs provided by a living trust can come in the form of specifying our conditions of care during our final years. Rather than it being an ongoing discussion of shared time between family caregivers, we can provide instructions for our own hospice. In the event that we become incapacitated, or incapable of managing for ourselves, a living trust provides the ability to design an advanced care directive. This directive can be updated and modified at any time, should our perspectives or forecast change.
Providing Care Plans for Disabled Dependents
The need to plan for the ongoing care of an adult dependent is a growing issue. The standard of needing to provide continued care for developmentally disabled, adult, children has grown to encompass the needs of those suffering from severe mental health issues, and for those with drug abuse concerns. Statistics indicate that nearly twenty percent of our adult population suffers from disabilities which necessitate ongoing support, and 75% of these are without any source of employment income.
A living trust can be designed to care for your dependent, after your passing, while avoiding some of the pitfalls of providing a direct inheritance. In leaving an inheritance, the task of managing the money may fall to the adult children, themselves, which carries inherent concerns under these circumstances. Further, receiving a chunk of money upon our death can result in a reduction – or even discontinuation – of their insurance benefits or disability payments. With a living trust, an established account can be managed by a trustee, resulting in timely and regular distributions of funds for those we care for.
Ability to Make Hassle-Free Changes
Unlike a will – which is considered final and written in stone until and unless it is replaced – a living trust is flexible. Changes to a living trust are accomplished by filing an amendment, rather than requiring that the entire document be modified. In this way, it is very similar to our own United States Constitution, but without the need for lengthy deliberation or extensive approvals.
To modify your living trust, a form – simply consisting of even a word processing document – will need to be drafted. In this document, you need only to specify which section of the existing trust is being modified, and then include your new specifications. Then, a notary verification is added to the signature of the grantor and trustee in order to make the new document binding. Attach the new document to the original, and your changes are set.