Key Takeaways:
- Avoid Probate: Assets in a revocable living trust bypass the probate process, ensuring a quicker and more private distribution to beneficiaries.
- Maintain Privacy: Unlike wills, which become public record during probate, trusts remain private, keeping your estate details confidential.
- Ensure Continuity: In the event of incapacitation, a successor trustee can manage your assets seamlessly, avoiding court-appointed guardianship.
- Retain Control and Flexibility: You can modify or revoke the trust during your lifetime, adapting to changes in circumstances or intentions.
- Efficient Asset Management: A revocable living trust allows for organized and efficient management and distribution of your assets according to your wishes.
When it comes to estate planning, there are many tools that can help you ensure that your legacy is secure and provide you with peace of mind. From drawing up a will to naming a power of attorney, there are numerous resources that help you tailor your estate plan to your specific needs. One such tool is a revocable living trust—an arrangement in which you set certain assets aside to be distributed by a designated individual after your death. This arrangement has several advantages over a will and can be an essential tool for your estate plan.
How Does a Revocable Living Trust Work?
In a revocable living trust, you select certain assets and set them aside so that they can easily be distributed after you’ve passed on. In all types of trusts, a designated trustee is in charge of managing these assets during your lifetime and distributing them to your loved ones after you’ve passed on. In an irrevocable trust, though, the grantor usually serves as their own trustee, managing and using the assets in the trust as long as they remain of sound mind and body. In this arrangement, you name a successor trustee who will take over the management of your assets if you should become incapacitated or after you pass on, and they are bound to manage the trust according to your stated wishes.
What are the Advantages of a Revocable Living Trust?
Although not always the right option for every estate, a revocable living trust is an essential estate planning tool and has several advantages over both wills and other types of trusts.
These include:
- A revocable living trust is not subject to probate. Probate is a lengthy and potentially expensive process in which wills are certified by a special court. Trusts are not subject to probate and allow your loved ones to receive your prized assets with no hassle.
- Trusts maintain your privacy. Because they are not subject to the public probate process, trusts allow you to keep the details of your estate private.
- A revocable living trust makes it easy for your wishes to be carried out. While you generally maintain control over your assets during your lifetime, should something happen to you, the trust ensures that your designated successor will immediately take responsibility for your assets and manage them according to your wishes. This can greatly add to your peace of mind.
- A revocable living trust allows you control and flexibility. Unlike in an irrevocable living trust, in which you cannot make changes to the arrangement, a revocable trust allows you to maintain control over your assets, using them as you see fit. Because the terms of the arrangement are changeable, you have the flexibility to alter them according to your needs.
FAQs
What is the difference between a will and a trust?
A will is a legal document that outlines how your assets should be distributed after your death and requires probate, making it a public record. In contrast, a trust, particularly a revocable living trust, becomes effective during your lifetime, allows for the management of your assets both during life and after death, and typically avoids probate, keeping your affairs private.
How can I avoid challenges in my will or trust?
To minimize the risk of disputes, it’s essential to ensure that your estate planning documents are clear, legally sound, and regularly updated. Consulting with an experienced estate planning attorney can help you draft documents that reflect your intentions accurately. For more detailed strategies, refer to our blog post on How to Avoid Challenges in Your Will or Trust.
What is the difference between a revocable trust and an irrevocable trust?
A revocable trust can be altered or revoked by the grantor during their lifetime, offering flexibility and control over the assets. An irrevocable trust, once established, cannot be easily changed or revoked, but it provides benefits such as asset protection and potential tax advantages. For a deeper understanding, read our blog post on Irrevocable Trusts Revealed.
What is probate, and why do I want to avoid it?
Probate is the legal process through which a deceased person’s will is validated, and their assets are distributed under court supervision. This process can be time-consuming, costly, and public. By establishing a revocable living trust, you can bypass probate, ensuring a more efficient and private transfer of assets to your beneficiaries.
Contact Deliberato Law Center
If you have questions about setting up a revocable living trust or about determining which estate planning tools are right for you, the experienced attorneys at the Deliberato Law Center are here to help. To find out more, listen to this helpful podcast in which attorneys Matt Deliberato and Andrew Jaloza answer all your questions about trusts or fill out the form below.
