Elsen Law can help you determine if a revocable living trust is best for you. Discover how the revocable living trust’s flexibility and revocability may benefit your estate plan.
Probate is efficient estate management and take charge of your financial future with a revocable living trust. Elsen Law will provide expert advice for personalized insights into understanding and navigating the world of estate planning.
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Revocable Living Trust Overview
A revocable living trust is a legal arrangement in which an individual (the grantor or settlor) transfers their assets into a trust during their lifetime. The person creating the trust can also serve as the initial trustee, maintaining control over the assets placed in the trust.
Often what is not contemplated about making an estate plan is the implications of probate—court supervision over the distribution of certain estate assets. The probate process inevitably incurs significant attorney fees and is lengthy as it must foloow strict statutory requirements.
Using the revocable living trust in conjunction with a will is a powerful estate planning tool to avoid probate and increase efficiency and simplicity to those who will benefit from your estate when you are gone.
The key features of a revocable living trust include:
Revocability
As the name suggests, the grantor retains the right to modify, amend, or revoke the trust at any time during their lifetime. This flexibility distinguishes it from an irrevocable trust.
Living Trust
The trust becomes effective during the grantor’s lifetime, as opposed to a testamentary trust, which is created through a will and takes effect after the grantor’s death.
Asset Management
The grantor can place various types of assets into the trust, such as real estate, bank accounts, investments, and personal property. The grantor continues to manage these assets as the trustee, maintaining control over them.
Probate Avoidance
One of the primary advantages is the potential to avoid probate, the legal process through which a deceased person’s estate is administered. Assets held in the trust typically pass directly to the beneficiaries without going through probate, saving time and reducing costs.
Privacy
Unlike probate proceedings, which are often a matter of public record, the administration of a revocable living trust is generally private. This can be beneficial for those who prefer to keep their financial affairs confidential.
Incapacity Planning
The trust can include provisions for the management of assets in the event of the grantor’s incapacity. A successor trustee, named by the grantor, can step in to handle trust affairs without the need for court intervention.
It’s important to note that while a revocable living trust provides benefits like probate avoidance and incapacity planning, it does not offer tax advantages or protection against creditors. Additionally, for the trust to be effective, assets must be properly transferred into the trust, a process known as “funding the trust.”
Consulting with an attorney experienced in estate planning is advisable when considering a revocable living trust, as the specific laws and requirements can vary by jurisdiction, and individual circumstances may warrant personalized advice.
Disclaimer: This article is for informational purposes only. Do not rely on any part of this blog as legal advice. Instead, seek out the advice of a licensed attorney. Also, this information may be out-of-date.
