Don’t Get a Living Revocable Trust for the Wrong Reason
Revocable Trust
A living revocable trust can be a useful tool to potentially help you avoid probate, reduce estate settlement costs and to maintain a higher level of control over your assets while you’re living.
This type of trust is not for everyone, but an estate planning attorney can help explain the benefits of the living revocable trust and how it will vary from family to family.
A living revocable trust allows you to transfer your property to a trustee with instructions to hold the assets as specified within the trust for the benefit of the beneficiaries.
The signed trust agreement often covers three very important time periods.
In most
cases, you would be the sole beneficiary and sole trustee. You’ll have complete
control, access and flexibility over the property owned by the living revocable trust, including the authority to remove all of the trust’s assets and the ability to revoke the trust at any time, for any reason. The second time frame stipulates that if you become incapacitated, the successor trustee that you previously named in the living revocable trust will take over the functions to manage the assets for you. Finally, the third phase directs the disbursement of the living revocable trust assets after you pass away.
A living revocable trust, by itself, will not completely eliminate estate taxes if your estate is in excess of $2 million ($4 million if married) as of 2007. Yet it can help you to minimize these taxes by allowing you to take advantage of marital deductions, estate tax exclusions, and generation-skipping tax exemptions.
Property in a living revocable trust will also avoid probate court, thereby streamlining transfer of assets to your heirs and reducing settlement costs. As probate costs and attorney fees can often reduce an estate by as much as 4- 10%, significant costs can sometimes be saved by planning to incorporate a living revocable trust.
Living revocable trusts have helped many retirees and their families to better manage their assets.
A Better Understanding of the Revocable Trust
Although it is difficult to think about times when you are no longer around, it is important to do so to ensure that your loved ones will be taken care of. One option you should look into is a revocable trust. This offers confidence in what otherwise can be a very troubling decision to make.
You’ll be working with several people as you set this up, including the primary trustee and a secondary trustee who will work with the property and benefactors who will receive it. True, this does essentially the same thing as a normal will, but many people consider it a better option.
One of the reasons it is preferred is that it works in coordination with a living will to declare what will happen to both you and what you own should you be incapacitated. You’re going to want to have both of these, and should check with your state to see if they should be notarized.
If you don’t, your property might not go to the people who deserve it. When you have a revocable trust in place, you can be sure this won’t happen.
As you can see, you’ll want to get both the revocable trust and a living will as soon as possible.
