A revocable living trust can be an excellent estate planning tool, as it allows you to continue benefiting from the assets held in your trust. For example, you can use or spend these assets however you like by naming yourself as a trustee.
A living trust also empowers you to name a successor trustee who will take over the trust after your death. While these trusts often benefit estate plans, there are a few things to consider when deciding whether to create a living trust.
No tax benefits
As you may know, tax planning is essential in your estate documents. Unfortunately, living trusts do not provide any significant tax breaks. If the trust generates income, you will be responsible for paying taxes on such income during your lifetime.
Stringent maintenance
You must monitor your living trust as it will not update automatically if your life changes. For instance, if someone you love dies, you should review the trust and make appropriate changes. Another thing to consider is that you must title future assets you gain to the trustee.
Don’t overlook the advantages
So far, we have discussed two potential drawbacks a living trust may pose. However, adding one or more to your estate plan could offer several valuable benefits.
Four examples to consider:
- Trust property typically bypasses probate
- Retention of asset control while alive
- Ability to change or revoke the trust anytime
- Speedy trust property distributions after death
The decision to create a living trust depends on your personal wishes and your financial situation. Legal guidance and knowledge of Ohio trust and estate law can help you make wise estate planning choices.