Funeral Planning: What is a Living Trust?
Although much of the information you’ll find online regarding funeral planning has to do with funeral pre-plans and the kind of funeral insurance that allows you to tie your money into a specific funeral home, there are actually many different types of financial and legal steps you can take to secure your estate.
One such option in funeral planning is a living trust. Like a will, a living trust allows you to allocate your money and resources to your dependents. However, unlike a will, this contract can take effect while you are still alive. This not only makes a lot of the proceedings an easier transition, but you can cause your estate to avoid probate so that your family doesn’t have to wait for the legal system to process everything before they gain control of their inheritance.
All About Living Trusts
Most people don’t consider living trusts until they either have a large number of assets that will need to eventually be dispersed or if they have reached a point in their life where it has become necessary to make a will and consider funeral plans. These documents can be drafted with the help of an estate lawyer, who should also be part of the creation of a will and living will (not the same as a living trust).
In a living rust, the trustee (the beneficiary you choose) is the official owner of your assets while you are still alive. In order to process this kind of transition, you have to move all the necessary assets (including real estate titles, bank accounts, stock certificates, and other property) into the trust. Depending on the exact nature of your living trust, this may mean that you can control these items until your death, or that your beneficiary can start accessing your assets right away.
Overall, living trusts can help you avoid many types of inheritance taxes and also to control where and how your money is disbursed. They also allow you to free up your money almost immediately following your death, so that funeral costs can be defrayed by your estate without putting a burden on your family.
Of course, not even a living will is written 100 percent in stone. If you change your mind regarding your beneficiary, or if you acquire additional assets in the time between when the will is drafted and death, you can make the necessary adjustments to the living trust.
Living Trusts: What to Watch Out For
Unfortunately, there are organizations that will take advantage of you as you are addressing your end- of-life issues. You should never feel pressured to name your living trust beneficiary as anyone but who you have in mind, and the cost of drafting a living trust should not be any more or less than what you would pay an estate lawyer for a few hours of his or her time. Organizations that promise easy, at-home results could be part of a money-making scheme that charges thousands of dollars for paperwork or a “kit” that isn’t from a reliable source.
Always talk with your family members and family lawyer when making living trust (or any estate planning) arrangements. As long as it is done properly, a living trust is a great way to help with funeral plans and facilitate the transfer of your assets.
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By Amy Johnson