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An Overview About Living Trust
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In a layman's language, living trust, also called "inter vivos" trust is a trust that is formed while you are living, instead of the one which is formed after death.
In a layman's language, living trust, also called "inter vivos" trust is a trust that is formed while you are living, instead of the one which is formed after death. It is a legal arrangement in which a person (trustee) holds with himself/herself legal title that gives him/her the power to property for some other person (beneficiary). There are most commonly two groups for the trusts, one which is incharge during life and other set comes into picture when the first one has died. This second group is most often the children.
Sacramento Living Trust can help you in knowing everything about trust. Now there are several things attached to trust, so here we will provide you a complete overview about what it is and how it can be useful for you.
Benefits of Trust
Setting up trust can give several benefits to people, most common and best one of which is to avoid probate. After a person dies, the property transfers right away to the beneficiaries without the hassles of probate. It can help the beneficiaries in a big way and can help them in saving a lot of money as well as time. Some of trusts, which depend on which one is created by you, also provide tax advantage to the beneficiaries and donors. Suppose a donor becomes out of action due to any reason or illness, or even dies, trusts can be effective continuously. Unlike a will, when you create trusts, only the beneficiaries need to know about the assets of the trust and it distribution.
Kinds of living trust
There are primarily two kinds of living trusts and these are: revocable trusts and irrevocable trusts. Revocable trust, as the name would suggest, is a very flexible one. This means that prior to your death, i.e., while you are living, you can make all sorts of amendments in this trust. These revocable trusts are mainly used by the donors for reaping the benefits such as probate avoidance, tax planning and asset management.
On the other hand, irrevocable trust is a very rigid one. As a donor, you cannot make amendments in the trust while living. Only the trustees will hold the power of amendments. Irrevocable trust is useful for reaping the benefits for Medicaid planning.
Why do people set up living trust?
Though mentioned above, but we will discuss it in detail why do people set up living trusts.
Asset Management: You can manage your assets easily with the help of trust. Your trustee can either administer or invest the property of trust for benefits of more than one or one beneficiaries and you can manage your assets very well in this way.
Probate Avoidance: As described earlier, living trust helps in avoiding probate. Unlike will, your trust property can directly reach to the beneficiaries without any court jurisdiction.
Tax Planning: Many people also set us living trust for planning their taxes because with the help of trust many taxes can be avoided.
With the aforementioned information, you would have known that living trust is of great benefit for you and for any other information you can also contact the Sacramento Living Trust lawyer.
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