Will and Living Trust Provisions- Common Terms
Sometimes, an individual doesn’t want to draft a will because the process of going through probate can make the will a matter of public record. For these reasons, you may be investigating using a substitute to a will, a living trust. Although a living trust is not an exact replacement of a will, there are many advantages to establishing a living trust. Knowing how a living trust works and the various terms associated with it can help you achieve your estate planning goals.
Pour Over Provisions
In your will, you can administer directions for any assets not held in the living trust to be quote “poured over” to the trust at the time you pass away. These assets will then be managed alongside other assets arty within the trust. It’s important to remember that all assets placed in the trust at the time of your death will be subject to probate.
Contrary to popular belief, community property doesn’t automatically transferred to your spouse. If they community property law is in place, you and your spouse maintain a 50% interest in assets accumulated during the marriage. When one spouse passes away, the other continues with their 50% ownership of the assets. In order to transfer the other portion of this ownership over to the spouse, a will must be in place. Non-community property, such as Gibson inheritances, also must be detailed in a will.
Any property jointly owned between you and your spouse with established rights of survivorship can pass to the spouse outside of probate upon your death. This can significantly helped her surviving family continue life as normal after you have passed away. Some popular items to include in joint ownership include a bank account, home, and investment portfolio. In the aftermath of a loved one’s death, joint ownership can significantly reduce the amount of stress faced by families.
Living Trust Assets
One of the most common question surrounding the living trust is what types of assets can be placed inside of it. A living trust can be designed to accommodate numerous types of assets. Collectibles and investment portfolios may be included in a trust as well. Many people opt to use a living trust to maintain some privacy over the transfer of assets. Under a will, the assets listed inside may be shared as a matter of public record through the probate process. It living trust is not entirely like it will, however, so consult with your estate planning specialist for further details.