As you age, it may become increasingly important for you to have a solid estate plan in place to benefit your loved ones. You have numerous options available to you in terms of how to create that estate plan, and each method of protecting your assets comes with its own benefits and drawbacks.
You may find it particularly beneficial to create something known as a living trust when working on your estate plan, which is a type of fiduciary arrangement that brings with it certain notable benefits. When you establish a living trust, you typically name yourself as the trustee, giving yourself the ability to manage it as opposed to a third-party trustee. Typically, it is more difficult for beneficiaries to dispute the terms of a living trust than it is a will, and you may also have more control over how you leave assets behind when you use this method. Certain situations may make creating a living trust particularly worthwhile. For example, you may want to consider creating one if:
You plan to disinherit a child
Entering assets into a living trust enables them to avoid the probate process, so, a child you disinherit is typically not going to have a chance to protest the validity of your decision in court. This also helps you avoid having your affairs and allocations become part of the public record, thereby protecting some of your privacy.
You plan to leave children unequal amounts
A living trust may also be a smart option if you plan to leave your children unequal allocations. That way, they are not going to necessarily know how much you left each child unless they choose to share this information.
While these are two circumstances that may give you cause to create a living trust, other situations may make this type of arrangement a good idea. Keep in mind, though, that you are still going to need to create a traditional will even if you decide to move forward with a living trust.