There are many options at your disposal when you are doing your estate planning. One item that will likely come up is a living trust and whether it will benefit you. A living trust is a legal tool that gives an appointed person, known as a trustee, control over assets that have been designated for a beneficiary or heir. Many people use an Oklahoma living trust because of its benefits.
In this article, we will explore the benefits of a living trust. If you have questions about an Oklahoma living trust after reading this article or if you would like to discuss whether a living trust is the best type of trust for your estate planning needs, schedule a free consultation with the estate planning attorneys of Ball Morse Lowe.
What Makes a Living Trust Different from Other Types of Trusts?
As the American Bar Association points out, a living trust is simply a trust that you create while you are still alive, as opposed to trusts that are created after your death as a result of your Last Will and Testament. Other types of trusts are made when assets and property are placed in a trust upon a person's death. Then there is a trustee to manage the trust for the benefit of the named beneficiary. With an Oklahoma living trust, most people name themselves as the trustee when the trust document is created.
Making it a revocable trust is often recommended, as it gives you the flexibility to manage the assets and property and make changes as you see fit or even dissolve it. An irrevocable living trust is a trust that is created while you are alive. However, its terms cannot be modified or amended. You also cannot dissolve the trust without first seeking the permission of the named beneficiary or beneficiaries. Yet, an irrevocable trust does have some tax benefits. It could be beneficial to speak with an estate planning attorney about both options, particularly if you are concerned about how your beneficiaries may be affected by taxes.
A living trust is also referred to as an "inter vivos trust."
What Are the Benefits of an Oklahoma Living Trust?
As an article from the AARP Bulletin points out many benefits associated with choosing a living trust. Many people choose to create a revocable living trust over only relying on a will because a trust can help your survivors avoid probate court. The probate process is dreaded by practically everyone. It is time-consuming and it has the potential to become quite expensive if the matter is complicated or becomes contested. The probate code also requires several steps before the personal representative can begin the distribution of assets and property to the beneficiaries or heirs of the estate. With a properly drafted living trust document, assets in the trust do not go through the probate process. For many, this one benefit makes placing property into the trust worth it.
Some additional benefits include the following:
- It can be difficult for people to challenge the terms of a living trust. One of the most common reasons that the probate process can be extended (and thus become more expensive) is because the decedent's will is challenged. This is not to say that the trust cannot be contested, but it is more difficult to do so.
- In the event you become incapacitated, your property will still be taken care of by either a co-trustee, such as a spouse, or a successor trustee whom you have named. You can also name a successor trustee if you do not wish to name a co-trustee. Transferring ownership of the living trust would take place you become incapacitated.
- You can specify exactly how and when heirs will inherit their assets, such as all at once or portioned out over time.
- A living trust can hold various types of assets and property. Examples of assets in the trust include houses, land, bank accounts, certificates of deposit, stocks, mutual funds, notes payable to you, life insurance, business interests, intellectual property, oil and gas interests, tax-deferred retirement accounts, and personal property that is untitled.
- When you buy assets that require you to take its title or deed, you can inquire whether you have the ability to receive the title as the trustee of the living trust. Even if this isn't possible, you have the ability to immediately transfer the property into the trust. If you are not sure how to transfer the property, Ball Morse Lowe estate planning attorneys are here to help. Schedule your free consultation.
Another reason many people prefer to create a living trust is that, unlike a will, the terms of a trust will never be made public.
Get the Benefits of an Oklahoma Living Trust
Only you can determine whether an Oklahoma living trust is the best estate planning tool for your needs, but the estate planning team of Ball Morse Lowe is here to answer your questions and create your trust document. While this information may be useful, it should not be taken as legal advice as every person's situation is unique. To schedule your free consultation to learn more about an Oklahoma living trust, click here.