Q: What is a revocable living trust? --Conscientious Planner
A: Dear Conscientious: Revocable living trusts are legal relationships that connect three parties: the trust creator, the trustee, and the beneficiaries. A living trust allows the trust creator to put assets into a trust while the trustee manages them and the income they generate. As a valuable estate-planning tool, it’s referred to as a living trust because the assets are placed in the trust while the trust creator is still living. The assets are distributed whenever the terms of the trust dictate.
Living trusts offer many benefits. If you become incapacitated, the trustee can continue to manage the trust, and the trust can provide your family with financial support during that time, without your family having to go to Court. Along those same lines, when you die, all assets held by the Trust stay out of the Court process called probate, and are transferred to your heirs privately and stay under the control of the people you choose.
Living trusts can also be revised up until the date of death, and trustee fees are sometimes, but not always, lower than will executor fees. Despite all the benefits a revocable living trust can provide, you do still need a will as part of your comprehensive estate plan. Your will is needed to cover any assets that do not get titled in the name of your Trust during your life. And, your will is also where you name guardians for your children, although you should also name guardians outside of your will to cover your kids in the event of your incapacity or in the event that it takes time for your will to be located and probated.
Creating an estate plan requires difficult and important decisions. Some decisions—such as what type of trust to include—shouldn’t be made without guidance from a lawyer. There are many useful estate-planning tools, such as revocable living trusts, that can be included in your estate plan. Seek professional guidance when creating your estate plan so you can maximize the benefits and protections it will provide for you and your family.
If you want to protect your assets and your wishes, start by sitting down with a Personal Family Lawyer®. A Personal Family Lawyer®, can walk you step by step through creating a legally sound estate plan that will protect and provide for your family no matter what happens.