When people think of estate planning, they generally associate it with mortality. Although it’s true that you can’t take what you have with you when you go, it’s also crucial to plan and protect yourself while you’re still alive. Put simply, a revocable living trust is a legal document that allows you to remain in control of your assets while you’re alive, and then distributes them to your trust beneficiaries when you go without involving the probate court. This document appoints a trustee in the form of another adult, a bank, or a trust company, to handle the grantor’s assets after their death.
How Does a Revocable Trust Work?
First, a trust is a written agreement where assets and property are transferred from a grantor (the creator of the trust) to a trustee (the manager of trust assets). Often the grantor and trustee are the same person when talking about revocable trusts. A revocable trust is just as it sounds—a trust that can be revoked or amended at any time. A revocable trust, also referred to as a living trust, offers flexibility during a person’s lifetime, by allowing the grantor to add and remove assets, change instructions and beneficiaries, or eliminate the trust altogether whenever they please. Revocable trusts differ from irrevocable trusts, because irrevocable trusts cannot be modified or terminated without permission from the grantor’s named beneficiary.
What are the Benefits of a Revocable Trust?
Revocable trusts are ideal for anyone who is single and holds assets in their name. The goal, and main benefits of a revocable living trust, are to avoid guardianship if you were to become incapacitated, avoid the probate process at death, and to keep your matters private. Probate is a public proceeding, and, by creating a trust you can keep your assets out of public record. Another benefit is that it is flexible while you’re alive, allowing you to make amendments or changes as you see fit. It can also minimize family disputes by disinheriting anyone who may challenge your wishes.
The Difference Between a Revocable Living Trust and a Living Will
Estate planning can feel intimidating at first, especially if you are not familiar with the jargon, but that should not deter anyone from planning for their future and protecting their assets. Living wills and trusts may appear quite similar at surface level, but they are quite different. A living trust contains more comprehensive directions regarding your caretaking needs – such as whether or not you want to remain in your home than a living will because a living will accounts solely for what happens when you are incapacitated and near end of life. There are certain instances where you may not be able to speak for yourself, and if you do not have a living will in place for such measures, you lose your own voice in the outcome. This may happen, for example, if a person’s health becomes critical. A living will carries out a person’s wishes regarding end of life decisions when they’re near death—for example, whether or not a person wishes to be resuscitated. However, a revocable trust is meant to protect you and your assets throughout your lifetimes regardless of the circumstances.
If you are considering adding a revocable trust to your estate plan and want to work with an experienced estate planning attorney, contact our legal offices today.