A Good Plan Gives You Peace of Mind

Did you bring significant assets into your marriage? While you undoubtedly want your marriage to be a happy, healthy financial partnership, many spouses also want to maintain premarital assets separately from marital assets for the sake of future heirs or for liability protection. One of the best ways to ensure this is with a revocable living trust. How can such a trust help you protect your premarital assets? Here's what you need to know.

1. Trusts Are Separate Entities. A living trust is a separate legal entity from the individual who sets it up (known as the grantor). This means that when you transfer an asset into the trust, it is no longer your individual property but rather property of the trust. This is why a trust is one of the easiest ways to separate a particular asset from marital property, which belongs to both parties. 

2. Trusts Can Be Altered. There are two kinds of living trusts: revocable and irrevocable. While irrevocable trusts cannot be altered nor dissolved by the grantor later, revocable trusts can be changed at any time. So you can put your premarital asset in the trust now and take ownership back at a future time. You can also change the terms of the trust arrangement, such as if you want to change who the beneficiary is.

3. Trusts Are Simple. Establishing a trust sounds like a complicated process, but modern trusts can in fact be simple to set up and maintain. You can even do simple ones online with limited legal assistance from professionals. So whether your premarital assets are large or small, you can get the same protection for them. 

4. Trusts Can Be Passed On. One reason for many older adults to protect premarital assets is to reserve those assets for particular children. If you want to ensure that your parent's inheritance isn't mingled with your second spouse's inheritance for their biological children, for instance, you need a vehicle that avoids automatic inheritance rules. A trust is that vehicle. It bypasses probate and won't be bound by state inheritance laws. 

5. Trusts Are Private. If you value the privacy of your finances, particularly from before you were married, a trust can help. Unlike wills and other estate planning documents, the trust isn't open to the public. You can choose to share as little of the contents of the trust or as much as you want. This can avoid family problems among blended families, extended relatives, and married-in relatives. 

Want to know more about using a living trust to protect your premarital assets? Check out an online living trust service. You're sure to find this method of legal protection simple, cost-effective, and ideal for any size asset.