Do You Have A Living Trust? If Not, You May Want To Reconsider.

We see questions about living trusts all the time. And they’re important ones to think over. Afterall, they dictate where everything you?ve worked for ends up. However, it?s not always obvious they?re the best fit. Consider the following client email below:

?Hey [Crafted Finance], We’ve had some friends recently that have recommended that [Client Spouse] and I look into a living trust. I’ve done some basic research but I’m not fully convinced that this is something that we need given that we don’t have any dependents. What’s your thoughts on establishing a living trust for [Client Spouse] and I? Any benefits??

As a result, we wanted to take a deeper dive into the subject. Together we?ll review what a living trust is, their advantages, and whether or not one may be right for you. 

What Is A Living Trust?

A living trust is simply a legal document that enables the transfer of one?s assets, and can be used to bypass the often complicated and costly process of probate (more on this later). 

The creator of the trust, or grantor, designates a trustee who is responsible for managing the grantor?s assets until they reach the beneficiary. For example, a parent (grantor) designates their brother-in-law (trustee) to manage their assets until their child (beneficiary) is legally an adult. 

It?s also worth noting that a beneficiary can be an individual (ex: child) or an organization (ex: charity). Additionally, living trusts can be revocable or irrevocable. In a revocable trust, the grantor has the option of altering its specifics. But in the case of irrevocable trusts, they?re set in stone. 

The main difference between a living trust and a will is that a living trust goes into effect as soon as it?s created, and the distribution of the grantor?s assets can happen while they?re still living. Additionally, all wills must go through the process of probate, and aren?t able to bypass them like living trusts.1

Why Would You Want To Avoid The Probate Process?

There are numerous reasons to take advantage of a living trust. But we?ll start with the main one mentioned above, to avoid the probate process

What is the probate process? 

Probate is the formal legal process that administers the distribution of one?s assets upon death. It is overseen by a probate court, which has legal authority to preside over matters involving wills and estates.

The process may entail, but isn?t limited to validating a will, taking inventory and appraising assets, paying necessary debts and taxes, establishing an executor, and distributing the assets as laid out in a will (or lack thereof).3 

Probates can be extensive and expensive ordeals. Depending on the process, there can be considerable time spent preparing your assets and their distribution. Costs of seeing the process through may include, but are not limited to attorney fees, filing fees, appraisal fees, notary fees, and storage fees.4 5

However, by having a living trust, you’re able to bypass the probate process entirely. That?s because the assets inside a living trust are not considered part of your estate, and thus need no court to preside over their distribution. Instead, you?re able to transfer the assets held by the trust faster, cheaper, and more directly to your beneficiaries.4 

Please Note: The potential costs and length of a probate process can vary greatly by state. Additionally, if you do not have a will with a named executor, the probate court will appoint one itself. Lastly, it can make sense to have both a living trust and a will. A living trust can expedite the transference of major assets, and the will can deal with residual, less-important ones.

Are There Other Benefits To A Living Trust?

Outside of avoiding the probate process, there are a few other reasons why you may want to consider forming a living trust. They include, but are not limited to:

  • Flexibility – In the case of revocable trusts, grantor?s can continuously alter how they want their assets to be distributed overtime. By naming yourself as the trustee, you keep control over all the assets in your trust. You?ll be able to add or subtract assets, refinance them, or dissolve the trust altogether if and when you see fit.4  
  • Tax benefits – In the case of irrevocable trusts, grantors can realize certain tax benefits on their assets. For example, by moving property into an irrevocable trust it technically no longer belongs to you, but to the trust. Since you?re no longer the owner of the property, it won?t be included in tax calculations on the property?s value when you die.6 
  • Privacy – Since the probate process is a legal proceeding inside a court, it becomes a matter of public record. This means your estate?s assets and distributions will also be public record, and so will the terms of your will should you have one. Living trusts, however, are private and will remain so even after you die.4  

Conclusion

Whether or not you want to set up a living trust will depend on you, and your unique situation. And it?s something that can be beneficial to even those without kids. Remember your beneficiary can be people or a cause you believe in. Moreover, it?s best to have a plan in place to take care of your partner should something happen to you. 

You?ve worked hard to get to where you are, and it?s important to lay out how you want your assets to be distributed. While a will has its place, the add on of a living trust can have an incredible impact. It has the ability to bypass the probate process that wills can?t, and it will save your beneficiaries the headache of frozen assets, legal proceedings, and numerous expenses.

When it comes to deciding whether or not a living trust is for you, you?ll want to do your own research and contact qualified professionals. We recommend getting in touch with an estate planning attorney as they have the most experience in navigating these systems and tailoring solutions to your needs. 

We also recommend touching base with a financial advisor. At Crafted Finance we help our clients get a reign on their finances, and we walk them through the financial planning side of life transitions like these. If you have any further questions feel free to reach out to us at (650) 336-0598 or fill out a contact card here, and we?ll reach out to you.

Investment Advisory Services are offered through Crafted Finance, LLC, a registered investment adviser. Please remember that securities cannot be purchased, sold or traded via e-mail or voice message system. This advertisement and any documents, files or previous advertisements may contain information that is confidential or legally privileged.  If you are not the intended recipient, you are hereby notified that you must not read this transmission and that any disclosure, copying, printing, distribution, or any action or omission of this transmission is strictly prohibited.  If you have received this advertisement in error, please immediately notify the sender by telephone at (650) 336-0598 or return and delete the original advertisements and its attachments without reading or saving in any manner.

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Jon Fogg is a dynamic and innovative content creator who has been making waves in the digital realm. With a passion for creativity and a flair for storytelling, Jon has captivated the financial world through his engaging and diverse content.

When he’s is not working on an SEO blog or case study, you’ll find him enjoying local art galleries or a phenomenal read. Friends and colleagues often commend him for his clear enthusiasm and dedication, which is evident in every project he undertakes. 

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Compliance

Meet Kingston Hollman, the compliance guru everyone’s been talking about. With a sharp mind for regulatory ins and outs, Kingston is all about keeping businesses on the straight and narrow. That’s why he’s a go-to in the compliance world!

Sporting an MBA under his belt, Kingston’s not just about book smarts. He knows the fine dance between business strategy and staying in line with the rules. And guess what? He’s mastered it. Ensuring companies sail smoothly through the often-stormy waters of compliance is his game.

From the get-go, Kingston’s been crafting top-tier compliance programs, tailored just right for all sorts of industries. It’s his eye for detail and that knack for spotting the little things that make him stand out. He doesn’t just set up a system; he fosters a whole vibe of staying compliant, making sure everyone’s on board.

Jessica Martineau

Client Operations Manager

Jessica is a seasoned professional with a diverse background, bringing a decade of expertise across multiple industries. A proud graduate of SPU, her journey in the professional world is marked by significant accomplishments.

With nearly eight years dedicated to managing projects in the graphics and built environment sectors, Jessica has honed her skills as a meticulous Project Manager. This tenure has instilled in her a knack for thriving within organized structures while fostering robust client relationships, a hallmark of her professional ethos.

Her experience in the Finance industry spans almost a decade, where she has held pivotal roles as Lead Client Operations Manager and Director of Operations. Notably, her FINRA SIE Certification stands as a testament to her commitment to excellence.

Jessica’s strengths lie in cultivating enduring client connections, fueled by her passion for delivering thorough solutions. She finds joy in understanding and engaging with her colleagues, nurturing a cohesive work culture.

As a Pacific Northwest native, Jessica enjoys hiking, camping, and skiing. She loves reading, attending live music, plays, and comedy shows. Always a foodie, she delights in discovering new restaurants and revisiting old favorites, especially if there is a water view.

Most importantly, Jessica’s world revolves around her family—her amazing husband, Lee, and their two great kids. They are her inspiration and the anchor to her life outside of work.

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Let’s dive into the world of Dionne Kelly! Born in St. Kitts and with her roots deep in Barbados, Dionne’s been globe-trotting from her island homes to Canada, the USA, and Belize. Got a love for tropical spots? So does Dionne. Her passport’s got stamps that tell tales of sun, sea, and a bunch of awesome adventures.

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Oh, and did we mention she’s a foodie? Dionne’s taste buds have danced across diverse culinary landscapes, adding a sprinkle of global flavor to her persona. In the world of executive support, she’s a powerhouse, always two steps ahead and ready to make things happen. 

Joe Wride CFP®

Founder & CEO

Meet Joe Wride, the president and founder of Crafted Finance. With a knack for pension and investment management, insurance, and financial planning, Joe’s all about offering top-notch services without breaking the bank. That’s why he started Crafted Finance!

A proud Finance major from Washington State University, Joe’s got the credentials to back it up as a Chartered Life Underwriter and CERTIFIED FINANCIAL PLANNER™ Professional. Since 2009, he’s been helping individuals, families, and pension plans make sense of their finances. Joe’s even on the board of the Financial Planning Association’s Puget Sound chapter. Check out his LinkedIn profile here.

Joe gets that everyone’s got their own money story. That’s why he’s crafted a unique process to help folks of all stripes manage their finances, whether they’re flying solo, raising a family, or running a company. He’s all about learning and growing to make sure his guidance is just the right fit for his clients.

When he’s not crunching numbers, you’ll find Joe enjoying the Seattle life. He’s into skateboarding at Alki beach, biking, golfing, snowboarding, hiking, and camping. Sports fan? You bet! Joe’s a die-hard supporter of the Cougars, Mariners, Seahawks, and Sonics. But what really matters to him is family time with his wife Jessica, daughter Ocean, and dog Kanga. Joe’s excited to welcome more kiddos into their home through foster care and adoption in the future.

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