If you’re planning for your estate after you die, you’re probably considering setting up a living trust. The legal document will enable your heirs to skip probate, which is considered a lengthy court process in Mississippi. Read on to determine if a living trust in Mississippi is truly the right move for you. For more help with your estate planning, use SmartAsset’s matching tool to find a financial advisor near you.
How to Create a Living Trust in Mississippi
If you want to create a living trust in Mississippi, take the following steps:
Choose the type of trust. Most people prefer revocable living trusts (as opposed to irrevocable ones), because they can maintain control of their estate, remove assets at any time and cancel the entire trust if they wish. If you are married, you’ll likely want a joint trust, though if it’s a marriage from later in life and you have separate assets, two single trusts may be preferable.
Determine which assets you want to put in the living trust. For many people, it’s mainly property and business interests they want to protect from probate. Things such as bank accounts and life insurance policies can also go into trusts, but they don’t have to in order to avoid probate. Designating your beneficiaries on the accounts makes them transferable on death.
Decide who will be the trustee, the person who will manage the assets in the trust. You can appoint yourself (and your spouse as a co-trustee for joint trusts). If you do, you’ll also have to name a successor trustee to manage the trust should you become incapacitated or pass away.
Create a trust document using online software or with the assistance of a lawyer.
Sign the trust in front of a notary public.
Fund the trust by transferring your property into it. You can do this on your own but the paperwork can be tricky, so you might want to get a lawyer to help you.What Is a Living Trust?
Like a will, a living trust is a legal document in which you the trust creator or grantor states how you want your estate to be distributed when you die. Unlike a will, a living trust is also an entity that holds your assets while you are alive.
The primary purpose of a living trust is to avoid probate, the court process that validates a will. With a revocable living trust, you can name yourself as the trustee (you must name someone else with irrevocable trusts) and maintain control of the estate. When you die, the successor trustee will have a fiduciary responsibility to manage your trust as you directed and in the best interests of your beneficiaries.
You can fund a living trust with a number of assets and property, including:
There is no definitive price tag on creating a trust in Mississippi. It all depends on how complex your estate is and how you go about creating a trust. These days, you can do it for just below $100 with software. Or you can go the recommended route of hiring a lawyer, whose fees depend on his or her rate.
If your estate is large, you will probably benefit from getting the guidance of a financial advisor. Depending on your situation, it may be better to transfer certain assets and not others.Why Get a Living Trust in Mississippi?
Most people who set up a living trust want to help their heirs avoid the expense and delays of probate. Skipping the court process in Mississippi makes sense since the state has not adopted the Uniform Probate Code and so probate is considered lengthy. With estates that are clear-cut and simple, probate takes at least four to six months. It also comes with cost of attorney fees, as the state requires that probate attorneys represent estates (a layperson can’t do it.)Who Should Get a Living Trust in Mississippi?
Living trusts are not just for the wealthy. If your heirs will have trouble paying the bills on your estate while it is frozen in probate, you should consider setting up a living trust so they can receive the estate right away. Or if you just want them to receive their inheritance without the interference of the court system, you should set up a living trust.
That said, if your estate is small, a living trust is probably unnecessary. In Mississippi, there is a simplified process for estates worth less than $50,000.
Additionally, trusts are a good choice for people who want to provide for someone with special needs or who want to delay the distribution of their estate until heirs are, say, 30. (With wills, estates are distributed once probate closes). A living trust is also recommended if you are disinheriting someone or giving less to someone than than the person might expect. (A living trust is harder to contest than a will.)Living Trusts vs. Wills
Trusts can serve as solid estate planning tools. But wills are always recommended in conjunction with trusts to cover what was left out, either by choice or accident. Wills also allow you to do such things as name an executor (as opposed to the court appointing someone), instruct how taxes and debts are to be paid and state your preferred guardian for children who are minors.
This chart highlights the differences between living trusts and wills:Living Trusts vs. Wills Living Trusts Wills Names a property beneficiary Yes Yes Allows revisions to be made Depends on type Yes Avoids probate court Yes No Requires a notary Yes No Names guardians for children No Yes Names an executor No Yes Requires witnesses No Yes Living Trusts and Taxes in Mississippi
A living trust will have no impact on the Mississippi estate tax or inheritance tax, since the state does not levy either kind. There are benefits at the federal level, but only if you are leaving a very large estate behind. The federal estate tax (also called the death tax) only kicks in after the exemption of $11.4 million for individuals and $22.8 million for couples has been reached.The Bottom Line
Since Mississippi has a simplified process for small estates, a living trust makes sense for estates larger than $50,000. It is especially recommended if your estate is complicated, if you want to delay the distribution of your assets or if you want to provide for someone who has special needs. Mississippi does not use the Uniform Probate Code, so probate takes time and can be costly.Estate Planning Tips
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