What is a Living Trust?

Living trusts may take effect before or after cremations services, depending on the health and capacity of our loved one who set up the trust. Living trusts are a legal instrument, similar to a will, by which a person can designated one or more people to either manage all of their estate, including legal and financial manners, while they’re alive if they are incapacitated or unable to do so, or to take over those responsibilities when they die.

There are two types of living trusts. One is a revocable living trust and the other is an irrevocable living trust. The names of these living trusts give insights into what can and can’t be done with them after they are set up.

Once an irrevocable living trust is established, it cannot be altered in any way. Should the named trustees prove unable to handle their responsibilities or show themselves to not be financially responsible, they cannot be removed from the trust.

A revocable living trust, on the other hand, can be changed by the originator of the trust at any time. If a trustee dies or proves themselves otherwise incapable of carrying out their responsibilities for the trust, the person who established the trust can remove and replace them with another trustee at any time. Similarly, the assets included in an irrevocable trust cannot be changed or removed.

For people who are thinking about setting up a living trust, revocable living trusts give the most flexibility in terms of changing or altering the trusts (including what’s in the trust).

Why should you consider having a living trust instead of a will?

One of the things that a living trust can do is lower the amount of estate taxes, sometimes by several thousands of dollars. With a well-crafted trust, you can protect the assets of the estate from being taxed after the originator(s) of the trust die.

Another thing that a living trust can do is protect assets for minor children. A living trust can hold money for children who are not legally adults until they can responsibly handle the money themselves. Many living trusts stagger the release of money to minor children at various ages, presumably when they will need it (college, marriage, and home-buying) most.

A living trust can also protect the financial assets of an adult child who may not ever be able to handle them wisely themselves, whether that’s due to general poor financial management, or some kind of substance abuse problem. A trustee can hold the money in the trust for the child’s lifetime and distribute it to the child as it may be needed.

Keeping assets within a family is another reason why you should consider a living trust. In marital situations, if there’s a divorce, the marital assets, including any inheritance from a will, can be split between the spouses. With a living trust, family assets are not considered part of marital assets, so the family cannot lose them in the event of a divorce.

A living trust enables you to avoid probate. You can put all your assets into the living trust and transfer ownership of the trust to the trustee (you while you’re alive, and then the person or people you name as trustees if you’re incapacitated or when you die), and they’re protected from probate after your death.

For more information about the cremations services we offer, let our compassionate and experienced team at Hopler & Eschbach Funeral Home help you. You can visit our funeral home at 483 Chenango St., Binghamton, NY 13901, or you can call us today at (607) 722-4023.