Revocable (Living) Trusts
What is a Revocable Living Trust?
A trust is a contract between the maker and a trustee. In the contract, the trust maker gives instructions to the trust concerning the holding and administering of trust assets, These instructions specify how the assets are to be held and distributed during the maker’s good health, upon his or her disability, and ultimately upon his or her death. With a revocable living trust, a person can be (and usually is) both the maker and the trustee.
The term “revocable” refers to a set of power that are typically listed in the trust agreement which specify that the trust maker has the power to amend or revoke the trust. Upon revocation, the trustee is directed to return all trust assets to the trust maker In addition to having the power to amend or revoke, the maker has thee power to place assets into the trust, remove assets from the trust, make all investment decisions concerning the trust assets, and control and direct all payments and distributions from the trusts.
Why Consider Revocable Trust Planning
Privacy – A revocable trust can keep one’s affairs private from the public record. A will becomes a public document after death. Consider the many wills published on the internet.
Probate Avoidance – clients want to save the time and money associated with an in-state probate and a second probate if they have out of state property.
Better Disability Management – a Trustee as a principal has more power to manage your property during disability than an agent has under a power of attorney.
Additional Reasons for Creating a Revocable Living Trust
You can provide for your disability by appointing someone to administer assets while you are disabled in accordance with your detailed instructions on how to care for you and your loved ones.
You can create a special needs trust to take care of anyone in your family who may have a temporary or permanent disability or who may require special care.
You can create a common trust to care for you minor children from a common pool of the estate, assets just as you would if your family were still intact.
If some of you heirs are poor at handling money, you can arm a successor trustee with spendthrift provisions to restrain your heirs from their unwise spending or to provide protection from the claim so f their creditors.
You can delay distributions to heirs until they are mature enough to spend their inheritance wisely.
If you have contentious family members, you can reduce the likelihood of legal conflicts among them, since a revocable living trust is generally more difficult to contest than a will
Notice that the reasons above do not relate to the size of your estate. Its not about how much you have – its about how much you care.
Whether the reasons for trust planning listed above apply to you or not, it may be worthwhile to have a conversation with an attorney about will and trust planning. Of course, there are other reasons as well. If you have additional questions about trusts or would like to compare your specific situation with either a trust plan or a Will plan, please feel free to contact our offices to schedule a NO OBLIGATION meeting with one of our experienced attorneys today.