When undertaking the task of estate planning, you have the freedom to build a plan that meets the unique needs of your family. The earlier you begin planning your estate, the easier it will be to keep it updated throughout the changes in your life.
One of the most powerful estate planning tools to consider is a living trust. The benefits of creating a trust are many and include keeping your estate out of probate and maintaining your privacy.
What are the downsides of a living trust?
A living trust is a legal document granting a designated individual (called a “trustee”) the power to manage your estate on behalf of your heirs. Despite its advantages, however, you should also know about some potential disadvantages associated with these, although they are few:
- Creating a living trust is usually more complicated than creating a will. You must complete much more paperwork, such as retitling your property deeds and transferring property ownership to the trust.
- You have more decisions to make, like whether to create an irrevocable or revocable living trust. Most people choose a revocable trust because it enables them to change its terms anytime a significant event occurs (divorce, marriage, family death, etc.) during their lifetime — but these are less secure from creditors than irrevocable trusts.
- You will also need other estate planning documents for maximum protection. Certain assets are not eligible to be included in a living trust. Examples include jointly owned property and retirement plans. Adding a will ensures the proper distribution of any assets not covered in your living trust.
We encourage you to continue reading our website to learn more about estate planning in Louisville, Kentucky. An attorney can guide you through your options and help you understand what steps to take next.