A trust is a document that can be used for asset transfer, probate avoidance and tax planning. There are two basic types of trusts namely a revocable trust and an irrevocable trust. By reason of its revocability, a revocable trust offers a plethora of benefits to the trust creator (trustor), and this is why the vast majority of individuals prefer it over any other form of asset transfer.
Get professional help creating a revocable trust
Nevertheless, creating and executing a trust is not always so straightforward nor as easy as creating a will, and that is why you would require the expert services of a seasoned attorney specialized in establishing revocable trusts. A revocable trust lawyer will help you create and execute a revocable trust that addresses all your needs while offering you the best benefits. Kindly contact our law office to consult or hire a revocable trust attorney.
Understanding revocable trusts and how they work
What is a revocable trust?
A revocable trust is also known as a revocable living trust or simply a living trust. It is a document used to hold assets for a beneficiary. The person who creates the trust is known as a trustor or grantor. Assets held in a revocable trust assume the name of the trust and this is why they would pass to the beneficiary outside probate (because only assets that are held in the name of the owner may be subject to probate).
The trustor must name a trustee who holds a fiduciary obligation to manage the trust assets according to the instructions spelled out in the wordings of the trust.
However, a revocable trust allows the trustor to name himself as the trustee, thus being able to utilize the trust assets to his own benefit until death, after which a named successor trustee would then step in to manage the assets and ultimately pass them on to the beneficiary.
Benefits of a revocable living trust
- A revocable trust goes into effect during your lifetime
As opposed to a will, a revocable living trust goes into effect the moment it is funded by transferring an asset into it. It is effective both in life and death.
- It can be used to transfer assets during your lifetime
By reason of its being effective from the moment it is executed, it has the capacity to transfer assets while you yet live. This is highly advantageous if you wish to give a considerable part of your estate to a loved one now rather than waiting till you pass away.
- A revocable trust avoids probate
Assets held in a living trust take the name of the trust rather than the trustor’s. For this reason, the assets will pass outside probate. Probate is most often expensive, time-consuming and traumatic — a legal process hardly anyone would wish to have especially when the estate is large with complex assets.
A trust can be altered or revoked at any time during the lifetime of the trustor. You can decide to remove an asset from a trust at any time, and there are no restrictions. If you acquire new valuable assets, you can as well decide to fund them into the trust. If you wish, you can altogether terminate the trust and recover back all the assets into your name.
- Revocable trusts are highly effective for incapacity planning
Incapacity planning is a crucial aspect of estate planning. Although sad to imagine, anyone can become physically or mentally disabled at any time and so become unable to handle neither their personal nor financial affairs anymore. If this is not planned for, the court may be the one to appoint an agent who would make decisions concerning your health, well-being and finances on your behalf. This agent may not be who you want. But when you have a revocable trust, your trustee will immediately take charge of all your affairs during incapacity, and they are legally bound by their fiduciary obligation to carry out all their activities to your best interests.
- Avoids publicity
The worth of your estate would not be declared publicly, neither will there be any hearing concerning your assets and family as characteristic of the probate process.
A revocable trust is a guarantee that your loved ones would receive what you want them to receive immediately you die or even during your lifetime. They do not have to wait months or years.
- Guardianship for minors
If you have minors, your successor trustee will manage the assets for their benefit until they come of age to inherit. This ensures that your kids are cared for just as you instructed in the trust document.
Contact a revocable trust lawyer
It is important to note that not all assets can and should go into a revocable trust. Based on your estate situation and desires, your trust attorney will advise you on what assets to fund into the trust, help draft your wordings with clarity, and ensure the document is compliant with state laws.
A revocable trust lawyer is your best bet in ensuring that the trust is properly executed and your best wishes are actualized. Contact our law office today to speak with a revocable trust lawyer.