Revocable Living Trust

There are expenses, and there are investments. Yes, you have to put out some money to work with a lawyer to draw up a living trust. At the same time, creating a will is not free unless you try to view it yourself, and probate expenses can be considerable. In the long run, a living trust will pay dividends, and they can be far-reaching into the future if you have concerns about the money management capabilities of a beneficiary.

While both of these legal devices can be used to facilitate asset transfers, there are some significant differences. One of them is the way that the estate is administered after the passing of the decedent. A simple will is admitted to probate, which is a court-supervised proceeding that comes with some drawbacks. It is time-consuming, and beneficiaries receive nothing while the estate is passing through probate. This process is expensive, and it is public, so interested parties can pry into the details. Plus, it provides an open forum for anyone who may want to challenge the terms of the will. With a living trust, the trustee can administer the trust without court involvement. As a result, the pitfalls are avoided. There are other benefits, including asset protection after the death of the grantor, and the ability to provide measured distributions over time.

When you draw up the trust declaration, you name a successor trustee to assume the role after your passing. You can also give this trustee the power to administer the trust in the event of your incapacity. The trustee can be any mentally competent adult that you choose, as long as they are willing to assume the role. If you do not know anyone who would be a good choice, you can potentially use a professional fiduciary, like the trust department of a bank or a trust company.

No, while you are living, you will be the trustee of the trust. This means that you maintain complete control on every level. You can remove assets from the trust at will, add property to it, and change the terms as you see fit.

A revocable living trust is a trust that is established and active while you are still alive. As the name would indicate, you have the power to revoke the trust at any time.