For some people, estate planning can prove more difficult than it may for others. You may find this to be the case if you have family relationships that have become fractured over time. You may, for example, have certain concerns about leaving part or all of your estate to one or more of your children. Maybe you simply do not have much of a relationship with one child, or maybe that particular child struggles with, say, a gambling or substance abuse addiction and you fear your money would go toward such habits.
If you find yourself facing such a situation, it may benefit you to thoroughly explore your estate planning options so you can find some that best suit your needs. Many people facing similar familial circumstances find that they can achieve some of their estate planning objectives by creating a living trust.
Understanding the living trust
A living trust, at its core, is an estate planning option that gives you the ability to leave your children different amounts of money or prevent one or more of your children from receiving assets after you pass away, all while maintaining privacy. So, how does a living trust work, and how can you use one to accomplish these objectives?
Typically, when you establish a living trust, you name yourself as the trustee so that you can maintain the right to manage the assets inside while still able to do so. You will, however, need to name someone a successor trustee, and the responsibility of managing the trust will fall to this person when you die. Creating this type of trust helps you avoid probate, which would otherwise potentially give a disinherited child an opportunity to contest your wishes in court. Avoiding probate can also keep the details of your estate off the public record, which could prove beneficial if you have plans to leave your children unequal portions of your estate.
Creating a living trust can take some time and effort. That said, it may prove to be a decision that can benefit your family in the end.