A Revocable Living Trust is a powerful estate planning tool capable of giving you complete control over your assets while you are alive and after you have passed away. You do not need to transfer your assets all at once, but can do so as you acquire new assets and at the time of your choosing. One of the main benefits of a Revocable Living Trust, besides allowing your estate to avoid probate, is that it lets you make adjustments as your personal and financial situation changes. Some of the terms you will encounter, and that are helpful to know when discussing a Revocable Living Trust, include:
The person who is creating the trust.
The person, company or commodity that will manage the property in the trust according to how the trust documents direct.
The property that you have allocated into the trust.
The persons that you have designated to receive the assets in the trust.
As the creator of the trust, the grantor, you may appoint any competent adult as trustee. The Trust will establish guidelines for how the trustee may administer and distribute the assets of the trust.
The benefits of a Revocable Living Trust include, but are not limited to:
- Avoiding probate. Not only is the probate process time-consuming and needlessly expensive, it also exposes your assets and estate to public scrutiny
- The Trust is revocable, that is, it can be changed over time, to compensate for changes in your financial and family situation
- Standard Wills often cause disagreements among family members and other beneficiaries. The use of a Trust can help eliminate challenges to the Will and ensure the beneficiaries receive what you have intended for them
- A Revocable Living Trust can allow for separation of assets, which is useful for married couples
- A Revocable Living Trust allows for continuous financial management. As your wealth accumulates, so too will the assets in the Trust
Do you need an attorney to create a Revocable Living Trust?
While it is possible to create a Revocable Living Trust on your own, and there are various on-line services and software programs to help you do it, this can lead to financially catastrophic problems. A lawyer with experience in this area has the judgment and knowledge necessary to avoid the innumerable pitfalls and advise the course best suited for each individual situation. Every family is unique, with very specific dynamics, concerns and goals. A lawyer can take these into account and design a customized Revocable Living Trust capable of meeting your goals and anticipating potential problems down the road. It is safer, and quite often more economical in the long run, to have an attorney design and implement your Revocable Living Trust. It is also important to have an attorney review your Trust at least every three years, to make sure it is still valid, properly funded, and fully capable of meeting your needs.