In estate planning lingo, “to trust” has less to do with relying on someone and more to do with preparing an estate. There are many different types of “trusts,” but the most common two you may hear of are a “revocable living trust” and a “testamentary trust.” Both can effectively manage assets after your death, but the establishment is different.To establish a living revocable trust, you set it up now, or sometime during your life, and transfer your assets into the trust before you death – i.e. you retitle ownership of your home, your boat, and your beloved hunting shack into the name of the trust. Because it is a revocable living trust, you generally retain direct control of these assets. Done properly, you avoid probate. Setting up a living trust costs more on the front end but can help avoid probate expenses after your death.A testamentary trust is a trust established after your death – typically by your will. Your executor opens a probate to establish the trust. In certain situations, this may be more expensive and time consuming in the long run, but there is less room for error and requires less expense on the front end.If you want to discuss whether or not a trust is right for you, or have other estate planning questions, please stop in or call us at (320) 763-3141.
