You’ve worked hard for your money and property and protecting your assets is of paramount importance. Different legal tools provide different levels of protection for your wealth, so selecting the right tools to utilize and the best estate planning documents to create can be a complicated process.
One tool that could be a part of your estate plan is a living trust. Living trusts help to protect assets in vital ways, but there are some limitations regarding what these trusts can help you to accomplish.
A Miami trust administration lawyer can provide insight into the ways in which a living trust will – and will not – help you protect money and property for your own financial security and to pass on wealth to the next generation.
How a Living Trust Helps Protect Assets
A living trust helps to protect assets in the event that you become incapacitated. In case of incapacity, you may be unable to manage your assets. If no plans have been put into place to ensure a trusted and responsible party has authority to manage wealth, losses could occur.
While your loved ones could go to court and have a guardian or conservator named to manage wealth, guardianship proceedings can be lengthy and assets could be mismanaged or neglected in the interim until a guardian has been appointed. Further, the court may appoint an inappropriate guardian without the specialized knowledge necessary to protect assets.
If a living trust has been created, you can serve as the trustee unless and until incapacitation occurs, at which time the backup trustee can immediately assume responsibility for the management and protection of trust assets. This seamless process will help to protect the assets owned by the trust.
A living trust also protects assets by facilitating the timely and cost effective transfer of wealth outside of probate proceedings. Probate can be time consuming due to court backlogs and other potential issues that could arise during the probate process. It can also come at a cost of around three percent to seven percent of an estate’s value, according to estimates from Investopedia, although specific expenditures vary depending upon the size of the estate and complexity of probate proceedings. By avoiding the expense of probate and allowing heirs or beneficiaries to inherit more quickly, wealth can be better protected for the next generation.
Unfortunately, a living trust typically does not keep assets safe from having to be spent on nursing home if you need care and have too much wealth to qualify for Medicaid, and it may not allow you to avoid estate tax in circumstances where this tax is owed because your estate is a large one.
To find out about all of the different estate planning tools that you can use to keep your money and property secure, contact a Miami trust administration lawyer. An attorney can help you to decide if a living trust is the right tool or if you should instead make use of other estate planning documents to protect the wealth you’ve worked hard to acquire throughout your lifetime.