I hope you were able to catch our first chapter on this very important matter, in this issue we continue with the advantages of the living trust and also.
A living trust can contain other, separate trusts, which gives you a nice flexibility. For example, if you plan to leave some of your property to your minor children in trust, you could specify in your trust that the children’s property goes into a separate irrevocable children’s trust. You can design separate trusts for several beneficiaries, all funded (usually at your death) by the assets in your living trust.
Helps in managing your affairs
If you have a trustee, a living trust can manage your property. Say you rent out condos; your trustee can take over the management, while you receive the income, minus the trustee’s fees.
A living trust can also provide a way to care for you and your property in case you become disabled, which is why many people use them. You’d typically set up a revocable living trust, fund it adequately (or give someone in whom you have confidence power of attorney to fund it in the event of your incapacity), and name a reliable alternative trustee (often an adult child) to manage it should you become ill. This avoids the delay and red tape of expensive, court-ordered guardianship. And at the same time the trustee can take over any duties you had of providing for other family members.
Protects your privacy
Like all trusts, living trusts maintain the deceased’s privacy more than wills, since there’s typically no public record required. However, if the trust is funded through a pourover provision in your will, the items transferred from your probate estate may indeed appear in a public record, especially if the will is contested.
Easy to create and change
it’s not that hard for a lawyer to create a living trust tailored to your estate objectives, and you don’t have to go through the formalities required to execute or change wills : just ber certain that you are dealing with an attorney with expertise in this area of practice and have him it write one specific to your personal circumstances.
Good for far-flung family and assets
Say you want your estate administered by someone who does not live in Costa Rica (usually a child who’s grown up and moved away). A living trust might be better than a will because the trustee probably won’t have to meet the residency requirements or stay in the country to be impose upon executors.
- Cost. Though there may be some eventual saving in reduced or eliminated probate costs, registration fees and other incidental costs of the trust are incurred up front, while the savings generally don’t accrue until your death.
- Title problems. Not all items may be easily transferred into a trust. Jewelry can be a problem, and if you transfer title to your car into the trust, you may have trouble getting insurance on it, since you don’t own it anymore.
- Other traps. Revocable trusts (along with other nonprobate transfers like insurance policies) are not automatically revoked or amended on divorce, unlike wills. If you don’t amend the trust, your ex could end up being the beneficiary. If you’re in certain specialized situations, you might ask your lawyer whether a living trust is a good idea: