Have you considered creating a revocable living trust? According to Kentucky Revised Statutes Chapter 386B.4-020, a grantor has to be of sound mind, possess an intention of establishing a trust and have an intended beneficiary to create a living trust (or any other kind of trust). Here are some things you probably should consider, first:
Advantages of a living trust
Living trusts can be beneficial because:
- They’re effective immediately: Unlike a will — which goes into effect upon a testator’s death — a living trust becomes effective right after you create it.
- You can add or remove beneficiaries: Kentucky Revised Statutes Chapter 386B.6-020 permit grantors to make changes to living trusts. Perhaps an intended beneficiary has died, or you want to add a dear friend to your trust.
- You can avoid probate: Probate is an expensive process. Furthermore, it exposes information that you likely wish to keep private. Creating a living trust enables you to maintain privacy while easing the financial burden of your beneficiaries.
Disadvantages of a living trust
There are some drawbacks to living trusts including:
- Lack of asset protection: Creditors can access your money or property to pay off any outstanding debts.
- No tax advantages: Even with a living trust, assets aren’t shielded from estate and/or income taxes.
- Funding expenses: As a grantor, you need to find ways to fund your trust like opening new bank accounts and signing deeds. This can take lots of time and money to accomplish.
Creating a living trust for your loved ones can provide them with financial comfort, but it also has many obstacles. If you still wonder if a living trust is best for your situation, please reach out to experience legal help to aid you in your decision.