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How can a living trust benefit middle-class families?

On Behalf of | Jun 7, 2022 | Blog, Estate Planning |

Like many Americans, you may think that only wealthy individuals can benefit from creating a trust fund. However, this important financial tool may help you better manage your assets even if you only have a relatively modest estate.

A revocable trust, or living trust, can be especially useful for middle-class families. This type of trust allows you to move assets to a fund while maintaining control over when the terms of the trust begin and end.

How does a revocable trust work?

There are many ways you can fund a living trust, including transferring bank accounts, life insurance policies, investments, real estate or personal items. The terms of the trust determine how these assets will distribute to beneficiaries after your death.

When setting up the trust, you may act as a trustee yourself or designate someone else to handle the fund. You should also name a successor trustee who can manage trust assets if you no longer can.

Why create a revocable trust?

A living trust may help you and your family create an easier financial transition in the event of your death or incapacity. Potential benefits include:

  • Allowing heirs and beneficiaries to receive inherited assets without a potentially lengthy, expensive probate process
  • Naming a trustee or successor trustee who can handle your financial affairs if you become physically or mentally incapacitated
  • Keeping the specifics of your estate and your gifts to survivors private by avoiding a public probate proceeding

Another reason that you may find a living trust helpful is the fact that they are both adaptable and flexible. Whether you want to remove certain assets, change the trust terms, designate a new trustee or revoke the trust entirely, you may do so whenever you choose.