 TITLE: How to Plan Your Estate as a New Parent CONTENT: Consider a Living Trust\n-----------------------\nSetting up a living trust is more complex than just writing a will, but it can be a smart move if you have a lot of assets or a more complex family situation, such as an ex-spouse, children from an earlier marriage or a child with special needs.\nA living trust lets you shift ownership of your assets to a separate fund during your lifetime. This can have some crucial advantages over a will. Assets that are put in a living trust won't have to go through probate, so your heirs won't have to wait to inherit the property. A living trust also provides privacy, because unlike a will, it is not part of the public record. Finally, a living trust may enable you to protect money that would otherwise have to go to creditors after your death.\nLiving trusts may be revocable or irrevocable. A _revocable trust_ can be changed whenever you want, up until your death. During your lifetime, you are the trustee and the property in the trust remains yours. When you die, the property becomes part of your estate, and the successor trustee you selected will distribute it according to your wishes. Once all the assets have been distributed, the revocable living trust is dissolved.\nA revocable trust does not protect the assets in the trust from lawsuits. If you are sued by a creditor and lose the lawsuit, you might have to pay the judgment out of money from the trust.\nAn _irrevocable trust_ cannot be changed once you sign it. All the assets listed become the property of the trust. This means they aren't subject to estate taxes and can't be taken to pay your debts (unless the court determines you're using the trust to illegally hide money from creditors). An irrevocable trust is commonly used by people who have extensive assets. A revocable trust, which offers the flexibility to adjust as your family grows, is the better option for most new parents.\nThere's another reason a revocable trust is generally preferable for young parents. When you apply for a loan, lenders will ask you to list your assets so they can see how much money you have in reserve. Lenders know they can access the assets in a revocable trust if you default on the loan. However, they can't access an irrevocable trust, so you can't list it as an asset. This can make it harder to get a loan. END