Revocable Living Trusts
As its name states, a revocable living trust is one you create with the help of your estate planning lawyer while you’re living and that you can revoke or change any time you wish prior to your death.
Your trust must name the following three people:
- The person or persons who establish it, called the grantor(s).
- The person or persons who will benefit from it, called the beneficiary or beneficiaries.
- The person or persons who will manage it, called the trustee(s), and distribute the assets and the income they produce to the beneficiary or beneficiaries.
One of the nice things about a revocable living trust is that you can be all three of these people. Obviously, you’re the grantor since it’s your trust. But you can also be one of its beneficiaries, and you can also appoint yourself as the trustee. This allows you to maintain control over the assets you place in the trust, even though the trust now owns them, not you personally.
If you appoint yourself as the trustee, however, you should also name a successor trustee to take over your duties should you become incapacitated or pass away. Your successor trustee can be either an individual or an entity, such as a bank, law firm, etc.
Your trust is only as valuable as the assets you transfer into it. You probably will want to place assets in it that generate income or will likely appreciate in value over the years. Such assets could include the following:
- Investment accounts you solely own.
- Real estate you solely own.
- Tangible personal property you solely own, such as jewelry, works of art, rare books, silver, gold, antiques, etc.
- Life insurance policies on your life.
Since your trust will now own these assets, make sure to change any necessary documents, such as deeds, account ownerships, beneficiary designations, etc., to reflect this fact. One major benefit of this ownership change is that these assets will not become part of your probate estate when you die, assuming the trust is still in effect at the time of your death. This could not only save your heirs significant estate taxes, but also make these assets immediately available to them rather than having to wait for months for your probate estate to close.
Finally, your revocable living trust is a private document which does not become a matter of public record after your death the way your probate estate assets do. Get help with your revocable living trust from a law firm like Klenk Law today.