Let’s talk about a living trust cost and the bottom line: Namely, is there a significant savings? A living trust arises from and is governed by a trust agreement. The trust continues after the grantor (or settlor) of the trust dies. The assets held by the living trust are not subject to probate, so it has the potential to save costs and expenses affiliated with a probate proceeding.
Instead of probate, a trustee (or successor trustee) administers that trust and its assets, so the trustee can make decisions regarding the operation, preservation, and distribution of trust assets. The trustee also can address situations such as guardianship of minors or persons with special needs, to the extent allowed by the trust agreement. Avoiding the need for court time and costs on these types of issues can streamline decision-making.
A living trust can also preserve money. It can preserve assets by putting a structure in place so that a beneficiary does not have a sudden windfall of a large amount of money but rather receives the benefit of the trust assets over time or in connection with certain milestones, or may be tailored to a particular purpose, such as educational attainment, acquisition of real estate, or launching a company.
By limiting the uses of trust assets, a living trust can preserve them and avoid dissipation. Saving costs is one benefit, and preservation of assets is another.
What If A Beneficiary Isn’t Good With Handling Money?
When a family member or other beneficiary traditionally hasn’t been responsible with managing money, a trust can include appropriate restrictions that limit the amount and tempo of distributions to them.
For example, distributions can be limited by age, by amount, or by purpose (such as for health, education, and welfare). They can also be subject to trustee approval in some situations, such as when the beneficiary is a minor or under a disability. This ensures that the beneficiary is not given more than he can handle, and limits the ability of a beneficiary to deplete the trust assets needlessly.
Ultimately, a main purpose of the living trust is to set up a structure that maintains the trust assets, preserves them, and benefits the family or other beneficiaries. It’s not just an approach made for today — it’s what we call Estate Planning For Life. Should you have any questions regarding living trust cost, setting up a living trust and its benefits, talk to us at Windy City Legal.