There is a legal device called a revocable living trust that is an extremely effective and versatile estate planning tool. Though some people believe that trusts are only for the rich, you could benefit from this type of trust even if you are not a multimillionaire
If you establish a revocable living trust, you continue to control the actions of the trust, because you can act as the trustee and the beneficiary initially. You have the power to alter the terms of the trust, and as the name would suggest, you can revoke the trust entirely if you ever choose to do so.
When you create the trust document, you name a successor trustee to administer the trust after your passing or upon your incapacity, and you name successor beneficiaries who will receive distributions from the trust. After you are gone, the successor trustee would follow the instructions that you recorded in the trust. Assets would be distributed to the beneficiaries, and these distributions could normally take place in a timely manner, because the probate court would not be involved.
Probate is a legal process that would enter the picture if you use a will instead of a living trust and you have more than a very modest estate. While it serve a purpose, a will does come with some pitfalls.
The consumption of time is one of the drawbacks of the probate process. A relatively straightforward case can usually be probated in right around a year, and more complicated cases can take longer
There are also some considerable costs that can pile up during probate, and the proceedings are public. Interested parties who want to find out how you distributed your estate could access probate records to obtain that information.
Since revocable living trusts facilitate probate avoidance, they are widely utilized by people who want to avoid these drawbacks.
Conveying Assets Into the Trust
When you convey monetary resources into the revocable living trust, you are funding the trust. To do this, you make the trust the new owner of the property by changing the ownership registration. To transfer real estate into the trust, you would use a deed that is recorded at the local recorder’s office.
You could list the property that you are transferring into the living trust in the trust document. This property could alternately be listed on a schedule.
It would also be possible to utilize the trust agreement to transfer the property to the trustee. Since you will act as the trustee while you are alive and well, you would not be surrendering control of the property.
Learn More About Living Trusts
We have a valuable resource that you can access through this website if you would like to obtain more detailed information about living trusts.
Our firm has prepared a series of special reports that cover various different estate planning and elder law topics. One of the reports is devoted to revocable living trusts.
To get your copy of the special report, click this link and follow the simple instructions: Free Living Trust Report.
Latest posts by Timothy P. Murphy (see all)
- Differences Between a “Conservator” and a “Guardian” - January 19, 2019
- Who is Eligible for Veterans Aid and Attendance Benefits? - January 17, 2019
- Is It Hard to Contest a Will? - January 15, 2019