Advantages of Living Trusts
A living trust, sometimes known as a grantor or inter vivos trust, is a type of property ownership that allows you to:
Depending on the circumstances, living trusts can provide a number of other important benefits. For example, a living trust can eliminate the need for ancillary probate proceedings to handle property you own in another state. This can be particularly important if you own, or anticipate owning, real estate in more than one state. In addition, as a business owner, you may find that the living trust is an appropriate alternative for ensuring an orderly transition of the business to your successors in interest, whether they be your children or the current co-owners of the business.
In most cases, a living trust changes the role that a will plays in the estate plan. Ordinarily, a will's primary purpose is to provide instructions as to who will inherit your property and on what terms. A properly drafted and administered living trust already accomplishes that goal for trust property. However, the will can be used to address the disposition of property that is not in trust and perhaps to appoint a guardian for any minor children you may have. It is even possible to have the assets disposed of by the will "pour over" into the living trust and be administered by its terms.
In general, most types of living trusts do not reduce the grantor's overall income, estate, and gift taxes over and above what can be achieved through proper use of other planning tools. However, since they do minimize the costs and delays of probate, and can provide business continuity, they often prove to be valuable additions to clients' overall estate plans.