Inheritance distribution can be a complicated process, often resulting in disagreement and negative interactions between surviving family members. These difficulties can be compounded in a blended family, particularly when both spouses come into the marriage with adult children. In a case like this, a living trust can become an incredibly beneficial tool. Consider the following:
A properly written living trust is clear, and allows for a significant amount of freedom: it allows the grantor to choose exactly who will receive what, can provide the specific means by which those distributions are received, and can even allow the grantor to specify how the beneficiary is to use their distribution. It also can provide for the disinheritance of any natural heirs.
The distributions of a living trust are made by a third party: your chosen successor trustee (although, keep in mind that this trustee can also be a beneficiary). The trustee has the legal responsibility to fulfill the wishes in the trust, which, if the wishes are clear, can put an early end to family conflict. It can also avoid unwanted confrontations between family members as each would work directly with the trustee.
A living trust can ensure that a surviving spouse is provided for, while also allowing for separate and protected distributions to be made to the specific beneficiaries of the deceased spouse, with his or her separate property.
Through a living trust beneficiaries can receive protection against creditors and any other family member who claims to have legal right to the beneficiary’s distribution. This is called asset protection.
A living trust allows for your beneficiaries to avoid the process of probate, which is often a stressful and frustrating process, one that can propitiate family disputes.
If you find that any of these features of the living trust apply particularly to your family situation, a revocable living trust may be the proper estate planning tool for you.