A joint living trust is a contract between two spouses to protect their assets after one passes away.
First is yourself being the so called grantor and your trustee, which is your husband or wife.
Once you pass on, the trust will allow assets like your house, or your money, to be transferred to your spouse without going through probate.
Probate is when your assets are managed and distributed by the court, and of course there is a hefty tax.
A joint living trust is a great strategy to provide for the distribution of your assets and estate upon your death.
The living trust is a popular substitute for the old-fashioned will.
A trust can avoid probate where a will can't, plus there is a living revocable trust which can be changed, and irrevocable trusts, which cannot be changed.
You can set up a trust for yourself, so should you become incapacitated, you'll be taken care of.
A will on the other hand only comes into effect once you pass away.
One of the most common types of trust that is often used by individuals is the Revocable Trust, and the one that most married couples go with is the Joint Living Trust.
One should first identify what you want to be included in this trust.
Any type of real estate and personal property should be included.
Next is you should draft the trust agreement.
Having this trust agreement, you will be guided on how the Revocable Trust works.
You should also describe the type of trust created at the beginning of the agreement.
You should also include the survivorship provision if you want the trust to continue in its original form if one of the grantors dies.
Most importantly, you should name the beneficiaries, your husband, your wife your child or anyone in your family...
but in most cases, either the spouse or the child is the beneficiary.
You should also have a trustee.
A trustee oversees and manages the trust.
Trusts have indeed helped us a lot.
Let us say for instance, when someone dies with only a will, the estate is tied up for years in probate.
More so, probates can be very expensive in Government fees and other legal expenses.
A trust can avoid the entire probate process, leaving all the assets intact.
With a will, if you want to pass something like the family cottage to your son or daughter after you die, the cottage must be valued and then taxed.
Often, the children cannot afford to pay the taxes on the cottage, and it ends up being sold to cover the tax, and the child gets the remainder.
A will is a step in the right direction, but it can be costly to your estate.
A trust is more defined, and you can see your loved ones enjoy the benefits while you're still around.
Plus, with the tax advantages, you will give more to your loved ones in the end.