Living Trust Lawyers in Topeka
There is a perception that living trusts are only for people with large estates. However, trusts can assist with many types of estate planning goals for anyone with an estate worth around $20,000 or more.
A trust may have several benefits over a will – though it will not replace the requirement for a will.
At Irigonegaray, Turney, & Revenaugh LLP in Topeka, our estate planning lawyers can assist you with selecting the right type of trust and setting it up to accurately reflect your wishes and to be legally enforceable.
What is a living trust?
Trusts are financial arrangements where a “trustee” holds legal title to (and manages) assets for the benefit of another person (the “beneficiary”).
As the “grantor” of the trust, the person who initiates its setup must select both trustee(s) and beneficiaries carefully. The terms of the trust are legally binding and set out in a trust document.
Some trusts are set up within a will. These are called testamentary trusts and only come into effect after a person dies.
A living trust, on the other hand, is a specific type of trust set up while you are still alive. You may hear it referred to as an inter vivos trust. It has several benefits for passing assets on after you die and can help surviving loved ones avoid issues regarding your estate.
What are the main benefits of a living trust?
People set up living trusts for a variety of reasons but generally, it is to save time and money and/ or for extra privacy and control.
The main reasons are:
- To avoid probate proceedings for beneficiaries after the grantor dies
- To minimize estate taxes
- To maintain financial privacy (the contents of a will are a matter of public record)
- To maintain control and regulation over assets passed to minors or other family members
- To make provisions for if the trust owner becomes incapacitated
A last will and testament must be validated by the Kansas courts – a process called “probate”.
While some states have initiated the Uniform Probate Code, which simplifies the probate process, Kansas has not.
A living trust can help you avoid the complex probate process, which can delay the transfer of assets to beneficiaries and create extra costs for those left behind.
A living trust circumnavigates this process and can make the transfer of assets less time-consuming and costly. The trustee can simply transfer assets according to the terms of the trust deed – a process that usually takes weeks instead of months.
Once the assets in the trust fund have been transferred to the beneficiary, the trust ceases to exist. If assets need managing over a period of time on behalf of a beneficiary (for instance, until a minor child reaches the age of 19), the trust remains in existence until all assets have been transferred.
Who should consider a living trust in Kansas?
You don’t need a large estate to benefit from a living trust. Generally speaking, any estate over the value of $20,000 can benefit.
If an estate is under that value, Kansas does have a simplified probate process that may negate the need for a trust.
If you simply want to keep your family home out of probate, speak to one of our estate planning lawyers about setting up a transfer-on-death deed, which is simpler than setting up a trust.
You might consider setting up a living trust if the value of your estate is over $20,000 and you want to spare your family the expense and delay of probate court proceedings after you die.
A trust might also be a good option if you want to keep matters private and/or maintain some control over how your assets are passed on after you die.
If I have a living trust, do I need a will?
Setting up a living trust does not negate the need for a will. Everyone in Kansas who wants to maintain some control about what happens to their assets after they die should have a will. Otherwise, the local courts may decide.
Besides, a will can accomplish many things other than passing on assets.
You can name an executor of your estate, make provisions for the guardianship of minor children, offer instructions for the payment of debts/taxes, and specify funeral preferences,
You can also distribute other assets not included in your trust to other beneficiaries.
Many people set up trusts but own other property not covered by the trust or later acquire further assets. Without a will, the distribution of these assets would be at the mercy of the courts to decide, according to Kansas estate laws.
Note that a will can be changed at any point until you die, provided you have mental capacity. Whether you can change a trust depends on whether it is revocable or irrevocable – more about this below.
What is a family trust in Kansas?
Living trusts can have very specific or more general purposes.
A family trust is a specific type of living trust set up to benefit family members financially. The beneficiaries of such trusts are family members: children, grandchildren, siblings, aunts/uncles, cousins, spouses, and so on.
Like most living trusts, family trusts can revocable or irrevocable.
Revocable family trusts
The terms of a revocable living trust are flexible and can be altered or terminated at any time, provided the grantor has the mental capacity to do so.
As the grantor of a revocable trust, you can also act as its trustee but you should name successor trustees to take over if you become incapacitated or pass away.
When the owner of the trust dies, its assets are subject to both state and federal estate taxes.
Irrevocable family trusts
Irrevocable trusts are permanent and cannot be changed. The grantor signs over the rights to the assets it contains and relinquishes control.
There are tax benefits in doing this as the assets are not subject to estate taxes upon death – and they are also shielded from creditors. This can be a preferable arrangement if the estate is sued.
Irrevocable family trusts can be more complex to set up. You will need to name a third-party to act as the trustee and there are other important elements that you should talk through with your estate planning lawyer.
How to set up a family trust in Kansas
The basic steps required to set up a family trust in Kansas are as follows:
- Discuss your requirements with one of our estate planning lawyers
- Compare the different options presented to you by your attorney
- Decide who you want to act as a trustee (you or another trusted individual)
- Decide on the beneficiaries and who gets which assets
- Create the trust agreement with your estate planning attorney and notarize it
- Transfer assets to the trust to fund it (real estate, vehicles, fine art, collectibles, bank accounts, stocks, etc.)
Need help setting up a trust in Kansas?
Whether you are considering your options with living trusts or ready to set one up, the estate planning lawyers at ITR Law can provide considered guidance so that you meet your objectives with your trust.
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