What is a Living Trust?
Lawyers and financial planners often talk about revocable living trusts, but what are they and do you need one? A revocable living trust is a trust which is created by a principal (the person or group putting assets into the trust) and is funded immediately. Some trusts are not funded until someone dies. For example, some trusts are created to hold life insurance proceeds for the care of children or pets but are not in existence until after the principal dies and the proceeds are available. A living trust is one that is created and managed by the principal while s/he is alive.
What is “Revocable”?
A revocable living trust can be terminated or changed at any time by the principal. The real benefit to this type of trust is in providing the principal with the power to add or remove assets from the trust. The principal maintains control of the trust until he dies.
Benefits of a Revocable Living Trust
A successor trustee can be named to take over control of the trust in the event that the principal is no longer physically or mentally able to perform the duties of the trustee. This provides a seamless transfer of assets from the principal to the beneficiaries designated in the trust documents.
The transfer of assets does not have to go through a court proceeding so the estate saves the time and expense of a court proceeding. The documents also remain private versus court documents, which are public. There are also tax advantages to preserving and gifting assets through a trust rather than through other estate planning documents.
Get Legal Help
An experienced estate planning attorney can help you decide whether a revocable living trust is right for your estate. Explore the advantages and disadvantages for your particular circumstances today by calling us!