A living trust in Mississippi can be a valuable part of your estate planning. A revocable living trust (also called an inter vivos trust) can be used to manage your assets during life and distribute them after death while providing many other benefits.
Living trusts in Mississippi
A Mississippi living trust is established by the person placing the assets into the trust, known as the grantor. The assets are managed by a trustee, appointed by the grantor. The trustee can be anyone you choose, and most people select themselves to provide optimum control. The goal is often to place as many assets as possible into the trust, but some assets are not eligible, such as retirement accounts. During your life the trust is managed for your benefit. After your death a successor trustee (whom you name) will take over trust management and also distribute the assets to your beneficiaries according to the terms you set in the trust. A revocable living trust can be altered by you while you are alive. An irrevocable living trust is permanent.
Living trust in Mississippi assets will pass to your beneficiaries through your trust and this can happen as soon as your death (you may also distribute assets during your life). A trust does not need to be probated as a will does. A will must be approved by a probate court through a procedure that take months and requires the expense of an executor, attorney, and court fees. Additionally, assets passed by a will cannot be distributed until probate has finished, so heirs must wait months. Mississippi has not codified the Uniform Probate Code, so its procedures are considered complex. A simplified probate proceeding is available for estates worth less than $50,000 which is faster and inexpensive. If you have a small amount of assets this may be more cost effective than a trust.
Do I need a living trust in Mississippi?
Revocable living trusts allow you to have privacy because your trust is never made public or taken through a court procedure. The assets in the trust, beneficiaries, and terms of the trust remain secret. Trusts are also much more difficult to contest than wills, giving you peace of mind that your wishes will be carried out.
When you create a living trust in Mississippi, you also have the benefit of control over your assets during life as well as after death. While you are alive, you use your assets as you normally would, living in your house, spending your money, and giving gifts as you wish. Although the assets are owned by the trust, you have complete control over them. After you die, the successor trustee will continue to manage your assets and protect your investments. He or she distributes your assets to your beneficiaries according to the terms you set in the trust. You can choose to have assets distributed immediately, or set distribution for specific future dates, such as specific birthdates. This is in contrast to assets passed by will where the assets are distributed all at once, as soon as probate is concluded.
A revocable living trust protects you should you become mentally incapacitated. All of your assets are already controlled, owned, and managed by the trust and a conservatorship proceeding is likely unnecessary for you to have your financial life managed for your benefit.
Living trusts and estate taxes in Mississippi
Living trusts are not a shelter from estate taxes, except in some very specific situations. Mississippi does not have an estate tax, but the federal government applies an estate tax to estates worth over $5 million. Specially constructed trusts, such as a QTIP, AB, or marital trusts pass assets from a spouse to surviving spouse while avoiding estate tax. Your trust does not shield your assets from Medicaid law, and it also does not shield them from creditors.
How to create a living trust in Mississippi
Creating a living trust in Mississippi occurs when you sign the written Declaration of Trust before a notary and then fund the trust. Funding the trust occurs when you transfer assets into the name of the trust. This must be done correctly and carefully to be valid. A living trust offers a variety of benefits that make it an important consideration in estate planning. Evaluate the options and decide if one is right for you.
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