There's a sad truth that there are things nobody tells you when it comes to a living trust. Trust is an important part of life and is often taken for granted, but what happens when something goes wrong? What if your loved one dies without a will or trust in place? Do you have any idea what would happen next? You need to read this blog post!

It Can Be Revoked

In case you are not sure about something in the document that has been conjured up, you can revoke it. The thing about living trusts is that there are good and bad things, but one of the best ones is this feature. If you change your mind about something, or you find out that the trust is being mishandled in some way, you have the ability to revoke it.

That's a huge plus and can give you peace of mind. Just be sure that you do this in a timely manner so things are not left in limbo. However, you should know that not all are like that so check this when making one.

There Are Different Types

There are actually more types of living trusts than you may have realized. The most common are revocable and irrevocable, but there are also special types like charitable lead trusts and generation-skipping trusts that can be especially advantageous for certain families.

Here are the different types of a living trust:

A revocable trust can be changed or "revoked" by the person who made the trust during his lifetime. If you change your mind, you could revoke it and things would go back to how they were before.
An irrevocable trust can't be changed once you make it. That means all the decisions that were made when the trust was established would remain in effect no matter what happens later.
A charitable lead trust is a special kind of irrevocable trust that allows you to donate money or assets to a charity for a set number of years. After that time, the trust ends and the charity gets to keep everything.
A generation-skipping trust is similar, but it lets you leave money or assets to someone in a different generation than you.

There Are Certain Costs

You may have not known about certain things when you created your living trust. Some things not told about living trusts include certain costs which are misleading to the public.

They have a cost that is typically paid upfront or at least before it becomes active. You will need to determine if this amount of money is something you can afford while also considering all other financial factors in your life so as not to put yourself in debt with legal fees and other things associated with creating a living trust.

It Can Save On Estate Taxes

A living trust can help you save on estate taxes, which can be a huge relief for families or beneficiaries of high net worth estates. Estate planning attorneys often play this fact down because they want to sell their services and get paid more money. However, you owe it to yourself and your loved ones to understand the benefits so you will know if one is right for you.

A living trust can help you avoid probate, which is a court-supervised process that often costs thousands of dollars in legal fees. Bypassing probate also means your loved ones will inherit your assets faster.

Don't Confuse It With A Will

Even though they may look like one, a living trust is not a will. The two documents serve different purposes and the things that they do are also very different. If you die without a living trust, your assets can be distributed as per the terms of your will but if you have a living trust, those assets go to whoever was named in it instead according to its own terms.

For instance, if you have a living trust and it only says that the assets go to your spouse but no one else then they don't. If there is more than one beneficiary for certain things like bank accounts or insurance policies then it follows a list of priorities according to what was named in each document so things can get complicated very quickly.

They Are Flexible

You need to know that a living trust is flexible. It can be amended at any time, as long as you are mentally competent to do so. You also have the ability to choose your own successor trustee, which gives you a lot of control over who will manage your estate after you die. This level of flexibility is not available with other estate planning options like wills.

Your needs may change over time, and that's okay! A living trust can be amended to reflect those changes.

A living trust is an important document that has revocable and non-revocable types and you should watch out for this when making one. It's pretty expensive, but you can save lots on estate taxes. Never confuse this document with a will and know that you can change it when you want. Always get informed better when making legal documents like these.