Who needs a living trust?

A living trust can be useful to many people, but it may not be suitable for everyone. As a means of estate planning, what everyone requires will depend significantly on the individual state, financial status, and personal goals. Here are some situations where a living trust such as this can be extremely helpful:

1. Homeowners with High Equity:

• Purpose: A living trust serves to manage a person's property, such as a home, and other major assets, and smoothly transfer them upon death. 
• Benefit: A living trust avoids probate, proceedings that are lengthy, costly, and public.

2. People Who Wish to Avoid Probate

• Purpose: Probate is a legal process by which a will is proved in a court, and thereby it becomes public record; it also could be costly and take several months or even years of time.
• Benefit: A living trust avoids probate, as the transfers of assets are not via a court but straight to the beneficiaries .

3. Parents with young children

• Objective: A majority of people with young children would like to assure that their children continue to be supported.
• Benefit: One could continue to provide for the children at least till a certain age, as she or he may instruct on asset management to have proper management of the assets thus secure child inheritance .

4. Persons in Complex Family Situations:

1. Purpose: A living trust can be very effective where there are concerns over blended families, second marriages, or estranged family members, and it can also help circumvent potential disputes.
2. Benefit: One is in a good position to carefully and specifically distribute their assets as dictated by their specifications, hence reducing the chances of having to endure contestations and family fights.

5. Elderly or Other People Who Worry About Incapacity:

• Purpose: These can be for planning possible future incapacity due to age or illness:.
• Benefit: A living trust enables a prior named successor trustee to continue supervising the assets of the grantor automatically in case he/she gets incapacitated without thus preventing the need for court-appointed by a guardian or conservator

6. Business Owners:

• Objective: ensure the business continues to operate without a hitch when the owner dies or becomes incapacitated
• Benefit: he or she may use the living trust to provide directions on how to manage the business. This will ensure that the assets in the business are effectively managed or surrendered to the heirs.

7. Individuals Owning Property in Multiple States:

• Purpose: The purpose of holding a location-based property that is to be transferred across multiple jurisdictions.
• Advantage: A living trust avoids having assets being subjected to multiple will-probate administrations in different states and jurisdictions. This could be a wastage of time and legal fees.

8. Privacy-Sensitive People:

• Purpose: For many, the preservation of the privacy of the information concerning their financial affairs is important.
• Advantage: Unlike the wills exposed to nontechnical and public probate, a living trust holds confidentiality regarding the details relating to the disposition of assets.

9. Those who would like to control the ultimate distribution of the assets:

• Objective: To set a certain age at by which the beneficiaries receive their inheritance, say, or by the time they are out of college.
• Benefit: The living trust can provide for more detailed instructions regarding how the amounts will be distributed and at what time; hence controlling the inheritance.

10. Those having an incredibly high net worth:

• Objective: High net worth individual alway needs that extra amount of estate planning.
• Benefit: A living trust can form part of an estate plan for reducing estate taxes and managing the transfer of wealth efficiently.

When You Don't Need a Living Trust:

• Simple Estates: If your estate is small, and your desires are uncomplicated, you might need nothing more than a simple will.
• No Concern for Privacy: If you're not concerned about privacy or probate avoidance, nor see any reason  to manage your property, then a living trust won't be of much value.
• Minimal Assets: A living trust can be overkill if all of your readily transferable assets—such as those with joint ownership or those with beneficiary designations or from payable-on-death accounts—might pass through your probate executor anyway.

Conclusion:

A living trust is a powerful estate planning tool, but it's not for everybody. It's best to meet with an estate planning attorney or financial advisor to determine whether a living trust is appropriate based on need and specific goals. At One Pacific Trust, our vision is to be the leading provider of trust services.