Revocable Living Trust Assets: A Comprehensive Guide
With a revocable living trust, you maintain control over your personal assets while you’re still living. After you pass away, you can select beneficiaries and a successor trustee to determine what will happen to the assets held in the trust—all without the assets having to go through probate.
Benefits of a Revocable Living Trust
- Avoidance of Probate: One of the primary advantages of a revocable living trust is the avoidance of probate. Probate can be a lengthy and costly process, but with a trust, your assets can be transferred to your beneficiaries seamlessly and privately.
- Control and Flexibility: As long as you are living and can make decisions for yourself, you can change a revocable living trust. You are free to change the assets you own, sell them, and do what you see fit with the proceeds. Replacement trustees and beneficiaries may be added, modified, or eliminated.
- Incapacity Planning: If you become incapable of managing the trust, a named successor trustee will take over and will manage the trust according to your instructions until you either regain competence or pass away. This ensures continuous management of your assets without court intervention.
- Privacy: Unlike a will, which becomes public record after probate, a trust can remain private. This means that the details of your assets and who inherits them do not become public knowledge.
How to Set Up a Revocable Living Trust
- Choose Your Assets: Decide which assets you want to place into the trust. This can include real estate, bank accounts, investments, and personal property.
- Select a Trustee and Successor Trustee: You will typically be the trustee of your own trust, managing the assets during your lifetime. You also need to choose a successor trustee who will manage the trust if you become incapacitated or after your death.
- Draft the Trust Document: Work with an estate planning attorney to draft the trust document. This legal document outlines the terms of the trust, including who the beneficiaries are and how the assets will be distributed.
- Transfer Assets into the Trust: You must re-title your assets in the name of the trust. This is a critical step; assets not transferred into the trust may still be subject to probate.
Common Misconceptions About Revocable Living Trusts
- Trusts Are Only for the Wealthy: Many people believe that trusts are only beneficial for the wealthy. In reality, anyone with assets they want to protect and manage effectively can benefit from a revocable living trust.
- Trusts Eliminate Taxes: While a revocable living trust can help with estate planning, it does not eliminate estate taxes. However, it can help manage them more effectively.
- Irrevocable from the Start: Some think that a trust is unchangeable once established. A revocable living trust, by definition, can be altered or revoked entirely as long as you are alive and competent.
Revocable Living Trust Assets – Frequently Asked Questions
Can I be both the trustee and the beneficiary of my revocable living trust?
Yes, you can be the trustee and also the primary beneficiary of your trust during your lifetime. You retain control over the trust assets and benefit from them.
What happens to my trust when I die?
Upon your death, your revocable living trust becomes irrevocable, meaning no changes can be made. The successor trustee will manage and distribute the assets according to your instructions.
Do I need a lawyer to create a revocable living trust?
While it’s possible to create a trust without a lawyer, it’s highly recommended to consult with an estate planning attorney to ensure that your trust is set up correctly and meets all legal requirements.
Conclusion
Revocable living trusts are a powerful tool for managing your assets during your lifetime and ensuring they are distributed according to your wishes after your death. By avoiding probate, maintaining privacy, and providing a plan for incapacity, they offer significant benefits. Speak with an estate planning attorney to sift through all of your choices to ensure that your assets pass to the right beneficiaries upon your death, whether or not probate is required. Estate planning is the specialty of St. Petersburg lawyer David Folkenflik, who can assist you in ensuring that your assets and property will be distributed according to your wishes following your passing.
Ask an Estate Plan Attorney Today
Don’t hesitate to reach out if you need professional guidance on your estate plan. Visit Hudack Law Estate Planning Attorney to learn more about our services. We’re proud to serve California, Utah, and Arizona. Call our Toll-Free line at (877) 314-4309 to schedule a consultation with one of our experienced attorneys.