A living revocable trust is a legal document that allows you to control your assets and designate how they will be distributed after your death. You can also use a trust to name someone to manage your assets and make decisions on your behalf if you become incapacitated.
How Does a Living Revocable Trust Work?
When you create a living revocable trust, you appoint yourself as the trustee, which means you are in control of the assets in the trust. You can transfer assets to the trust, such as your home, bank accounts, and investments. You can also name a successor trustee to take over as trustee if you become incapacitated or die.
Once you have transferred assets to the trust, they are no longer considered to be your assets for legal purposes. This means that they will not go through probate, which is the legal process of distributing a person's assets after they die. Probate can be a time-consuming and expensive process, so avoiding it can save your heirs time and money.
Benefits of a Living Revocable Trust
There are many benefits to creating a living revocable trust. Some of the most important benefits include:
Avoids probate: As mentioned above, a living revocable trust can help you avoid probate, which can save your heirs time and money.
Provides for incapacity: If you become incapacitated, a living revocable trust can name someone to manage your assets and make decisions on your behalf.
Maintains privacy: Assets in a living revocable trust are not subject to public scrutiny in probate court.
How to Create a Living Revocable Trust
You can create a living revocable trust by working with an attorney. An attorney can help you draft the trust document and ensure that it is properly executed.
Once you have created a living revocable trust, you need to transfer assets to the trust. This can be done by retitling the assets in the name of the trust. You should also review your trust periodically to make sure that it is still up-to-date.
Living Revocable Trust vs. Will
A living revocable trust is different from a will in a few important ways. First, a living revocable trust goes into effect while you are still alive, while a will does not go into effect until you die. Second, a living revocable trust can be changed at any time, while a will cannot be changed once you have signed it and had it witnessed.
Cost of a Living Revocable Trust
The cost of creating a living revocable trust will vary depending on the complexity of your trust and the attorney you choose to work with. However, the cost is typically a few hundred dollars.
Is a Living Revocable Trust Right for You?
A living revocable trust is a right for everyone. However, it is especially beneficial for people who:
- Have large estates
- Have minor children
- Want to avoid probate
- Want to provide for incapacity
Conclusion:
A living revocable trust is a valuable estate planning tool that can provide you with peace of mind knowing that your assets will be distributed according to your wishes. If you are considering creating a living revocable trust, please consult with an attorney to discuss your specific needs.
What is a Living Revocable Trust? Why Should You Create One? - I hope this article was informative.
