I’ve Heard About a Living Trust, So What Is It?

I’ve Heard About a Living Trust, So What Is It?

Living Trust

You may be among the many people asking the common question, “Should I have a will or a trust…and what is a trust?” Understanding the terms that come with estate planning is the first step in figuring out the best option for your unique situation.

 

What is a Living Trust?

A living trust is a legal document that states who will manage your assets if you become incapacitated or pass away. It also specifies who will receive your assets and how they will be distributed, all while avoiding the probate process. As the trustee of your trust, you can remain in full control over your assets—meaning you can still buy, sell, or manage them as you wish. Since a living trust avoids the court, it allows your financial matters to stay private.

 

Types of Living Trusts

There are two main types of living trusts: revocable and irrevocable. Each comes with its own set of pros and cons.

Revocable Living Trust: This type of trust is flexible and allows you to modify it anytime, meaning you can add or remove assets and beneficiaries. With a revocable living trust, you stay in control, as you can name yourself the grantor, the trustee, and the beneficiary while you’re still alive. However, it does not provide protection from creditors or estate taxes.

Irrevocable Living Trust: In contrast, this type of trust provides asset protection from nursing homes and creditors. An irrevocable trust requires you, the grantor, to give up control of the assets. Changes to an irrevocable trust can be challenging, but it can also offer other benefits for protecting your wealth against tax reductions.

Listen to our podcast episode, “Revocable vs. Irrevocable Trusts,” for a deeper dive into these two main types of trusts.

 

A Living Trust vs. a Will

A living trust avoids the probate process altogether, meaning your loved ones can access their inheritance much sooner. On the other hand, a will can only go into effect after you pass, and must be approved and overlooked by the court, delaying the distribution of your assets.

Download our free e-Book, “5 Essential Estate Planning Documents Every Adult Needs,” to gain valuable information on protecting your legacy from courts, nursing homes, and taxes.

Understanding these documents can help you decide if a living trust is the right choice for your legacy. Fill out the form below to connect with our team for personalized estate planning guidance.

 

Contact Miller Estate and Elder Law

If you are looking into long-term care options, the experienced attorneys at Miller Estate and Elder Law are here to help guide you through the process. Contact us today at (256) 251-2137 or by filling out the form below.

Subscribe to Our Blog

Having the Talk with Your Parents

Having the Talk with Your Parents

Having the Talk with Your Parents

Key Takeaways | Having the Talk with Your Parents

Conversations about estate planning can be uncomfortable but are essential.

Planning ahead can prevent family conflicts and crises later.

Many people mistakenly believe estate planning is only for the wealthy.

Medicare does not cover long-term care costs.

It’s crucial to have a durable financial power of attorney.

Approach the conversation from the perspective of your parents.

Discuss preferences for assisted living and care options.

Understanding financial implications is key to planning.

An elder law attorney can provide valuable guidance.

Regular communication about wishes can ease future decisions.

Episode Notes:

In this episode, attorney Bill Miller discusses the critical importance of having conversations with aging parents about estate planning and long-term care. He emphasizes the need for a plan to avoid family conflicts and ensure that wishes are respected. The conversation covers how to approach these discussions empathetically, the various options for long-term care, and the essential documents needed for effective planning.

Bill encourages listeners to take proactive steps to ensure their loved ones are cared for and their wishes honored.

Notable Moments:

(00:00) Introduction to Estate Planning Conversations

(01:17) The Importance of Planning Ahead

(03:43) Navigating Difficult Conversations

(10:23) Approaching the Conversation with Empathy

(15:12) Understanding Long-Term Care Options

(20:23) Final Thoughts on Planning and Communication

 

 

 

 

 

 

Subscribe to Our Blog

How to Get Paid as a Caregiver in Alabama

How to Get Paid as a Caregiver in Alabama

How to Get Paid as a Caregiver

Key Takeaways | How to Get Paid as a Caregiver in Alabama

Caregivers can and should get paid for their services.

Establishing a formal caregiver agreement is crucial.

VA benefits can significantly aid in caregiving costs.

Activities of daily living must be documented for care justification.

Medicaid qualification requires careful financial planning.

End-of-life wishes should be discussed and documented early.

Understanding available benefits is essential for caregivers.

Common mistakes can jeopardize Medicaid eligibility.

Self-care is vital for maintaining caregiver health.

Planning ahead can alleviate future financial burdens.

Episode Notes:

In this episode, attorney Bill Miller discusses the intricacies of becoming a paid caregiver in Alabama, emphasizing the importance of understanding legal frameworks, benefits available, and the necessity of formal agreements. He highlights the emotional and financial challenges caregivers face, the significance of planning for end-of-life issues, and the need for self-care to prevent burnout.

This conversation provides valuable insights into navigating the complexities of caregiving, Medicaid, and estate planning.

Notable Moments:

(00:00) Introduction to Caregiving and Legal Considerations

(02:50) Understanding VA Benefits for Caregivers

(05:49) Establishing a Caregiver Agreement

(08:47) Activities of Daily Living and Justifying Care

(12:07) Navigating Medicaid and Financial Planning

(15:10) End-of-Life Planning and Legal Documents

(18:05) Understanding Available Benefits for Care

(21:00) Common Mistakes in Caregiving and Planning

(23:57) Self-Care for Caregivers

(26:58) Conclusion and Resources for Caregivers

 

 

 

 

 

 

Subscribe to Our Blog

Having a Will Is Not an Estate Plan

Having a Will Is Not an Estate Plan

Having a Will Is Not an Estate Plan

Key Takeaways | Having a Will Is Not an Estate Plan

A will is only one part of an estate plan.

Many people mistakenly believe a will is enough.

Without a power of attorney, accessing funds can be difficult.

Probate can be a lengthy and costly process.

Beneficiary designations can override a will.

Blended families require careful estate planning.

Advanced directives are crucial for healthcare decisions.

Trusts can provide more flexibility than wills.

Education on estate planning is essential for families.

Comprehensive planning can prevent family disputes.

Episode Notes:

In this episode, attorney Bill Miller discusses the common misconception that having a will is sufficient for estate planning. He shares a case study illustrating the complications that can arise when individuals do not have a comprehensive estate plan, including the necessity of powers of attorney and advanced healthcare directives.

The conversation emphasizes the importance of understanding probate, asset distribution, and the need for a complete estate plan that goes beyond just a will.

Notable Moments:

(00:00) Introduction to Estate Planning Misconceptions

(05:30) The Limitations of a Will

(15:46) The Importance of Comprehensive Estate Planning

 

 

 

 

 

 

Subscribe to Our Blog

Long-Term Care Insurance: Understanding Your Options

Long-Term Care Insurance: Understanding Your Options

Long-Term Care Insurance

Key Takeaways | Long-Term Care Insurance: Understanding Your Options
 

Long-term care insurance helps leverage assets instead of liquidating them.

Medicaid has strict qualification requirements that many find challenging.

Traditional long-term care insurance often has increasing premiums and limited benefits.

Asset-based long-term care insurance offers lifetime benefits and is not ‘use it or lose it’.

Qualifying for long-term care insurance requires assistance with daily living activities.

Inflation riders can help maintain the value of long-term care benefits over time.

It’s crucial to understand the specific features of each insurance policy.

Long-term care expenses can significantly impact retirement savings.

Using an IRA to fund long-term care insurance can minimize tax implications.

Planning for long-term care should be tailored to individual circumstances.

Episode Notes:

In this episode, attorney Bill Miller discusses the intricacies of long-term care insurance, focusing on the importance of planning for potential long-term care needs. He explains the three primary ways to pay for long-term care, the benefits of long-term care insurance, and the differences between traditional and asset-based long-term care insurance.

The conversation emphasizes the need for individuals to understand their options and the implications of each type of insurance, as well as the criteria for qualifying for claims.

Notable Moments:

(00:00) Introduction to Estate Planning and Taxes

(06:05) Gift and Estate Taxes Explained

(12:01) Navigating Capital Gains Tax

(20:50) IRAs and Tax Implications

(26:07) Conclusion and Key Takeaways

 

 

 

 

 

 

Subscribe to Our Blog