A revocable living trust is an estate planning tool that has many benefits. If you want to control how your loved ones use assets or funds after you pass, or if you want to provide to someone else if you become incapacitated, a revocable living trust may be a good option for you.
Benefits of a Living Trust
The most important benefits of a living trust will vary depending on your unique financial and family situation. Below are just some of the reasons that individual use revocable living trusts.
- Privacy Concerns
When you pass away, your estate must be probated in many situations. The probate process is based on a public court proceeding. That means that virtually anyone could see the assets included in your estate and the amount your beneficiaries receive. Many people do not want this information public.
Having a trust allows you to pass assets and funds to your loved ones without making it public knowledge. You create the revocable living trust while you are alive and then it converts to an irrevocable trust after you pass.
- Avoiding Probate Altogether
In some situations, individuals can completely avoid probate by using a combination of estate planning tools. Many of those involve trusts. Probate is an expensive process that is often difficult for the family. Sometimes avoiding the whole process altogether can be a significant advantage for your loved ones.
- Tax Savings Advantages
By putting your assets in a trust, they are not involved in your estate. That means that you will not have to pay estate taxes on them. For those who are concerned about estate taxes, this tax savings can be thousands of dollars—and certainly worth the effort to create a trust.
- Controlling Assets and Funds
If you become incapacitated or pass away, you need to account for those who are depending on you to provide for them. However, you may not want the person you are providing for to have free reign over funds or specific assets. A trust allows you to create restrictions on your beneficiaries.
For example, if you have a piece of property that has been in your family for generations, you can explicitly state that your beneficiary can have the property, but only if they do not sell it. You can even set up a trust specifically to hold your life insurance proceeds, so your loved ones have restrictions on how that money is used.
Creating a Revocable Living Trust
You may be surprised to learn just how simple it is to create a revocable living trust. You must draft a trust document that sets out the parameters of the trust. That includes providing the following information:
- A description of the property or funds in the trust
- Naming a trustee to administer the trust
- Naming beneficiaries
- Describing how the beneficiaries will get funds or assets from the trust
The trust document is often only limited by your imagination. You can create many types of conditions or requirements for your loved ones. Elder Care Law Firm can help you create a trust that addresses your needs, goals, and accounts for your unique situation. Call today to set up an appointment with our team.
