Living trusts offer many benefits, including avoiding probate, sharing assets with friends or family, providing for professional management of trust property, protecting property from creditors, and saving money on taxes.
When you die, your property goes through a process called probate. In probate, a court distributes your property to the heirs whom you designate in your will. If you have no will, your estate is handled according to state law. Any property owned by your trust, and not by you, does not have to go through probate, which can save time and money for your heirs.
When you create a living trust, you can name one or more beneficiaries. This means you can share the benefits of property with your family, friends or loved ones while you are still alive.
When you create a living trust, you can choose whom to appoint as trustee. The trustee manages the trust property. You can appoint a professional trustee, such as a financial investor, to handle the money in order to produce more income.
If you put your property into an irrevocable living trust, then your personal creditors have a much more difficult time getting the property.
If you put your property into an irrevocable living trust, then the income on the property in the trust is taxed to the trust, not to you personally. If your trust is in a lower income tax bracket than you personally, this results in a net income tax savings.