Many people believe that if they have a Last Will and Testament, their estate planning goals have been accomplished. If their goal is solely to express their wishes as to where their assets go when they die, then they may be right. If their goal is to accomplish this while also making it as easy as possible for their family and friends, with the least amount of expense, then they might consider a Revocable Living Trust. A Revocable Living Trust is a legal document that acts similarly to a Will, but does much more. There are many advantages to using a Trust.
Avoidance of Probate - Probate is the legal process for transferring your property when you die. Establishing a Revocable Living Trust avoids expensive probate proceedings. This is especially beneficial to your beneficiaries when you own real estate or property in several states.
Amendable or Revocable - The living trust allows you to make changes (or amendments) as many times as is necessary.
Privacy Preservation - Trusts allow the transfer of your personal assets to remain private within the constraints of the trust document. The probate process may expose your estate to the public.
A Revocable Living Trust is a legal entity separate from the person creating it. The Revocable Living Trust is created by a person, controlled by that person, and all the while that person is alive that person is also a beneficiary of the Trust. This means that once the Trust is funded, the person will still maintain control over all the assets just as they normally would. The Trust is funded by titling personal assets into the name of the Trust. The main benefit of this approach is that assets in the name of the Trust are not going to be subject to probate, but the person is still able to control the asset and be the beneficiary.
The Revocable Living Trust allows you to put your wishes and affairs only in the hands of the people that you trust. In addition, by avoiding probate, a process that can take anywhere from a few months to a few years, your assets can be distributed immediately to your beneficiaries. Furthermore, without probate you can ensure your assets go to your heirs and not towards lawyers and court costs.
The best part of the Revocable Living Trust, though, may be flexibility. You can borrow against the assets in the Trust, sell them, transfer them, or even give them away. You can also customize the document to fit your family's particular needs and concerns. A Trust allows you to hold money in trust for a child who is a spendthrift or a minor, make sure no money goes to a specific son- or daughter-in-law, or ensure that a family member with special needs will be provided for throughout the rest of his or her life, even after you are gone.
The Revocable Living Trust should also be accompanied by a document called a Pour-Over Will. A pour-over will is a safety precaution that states upon your death any assets you forgot to title into the name of the trust, or any assets you held out in your sole name shall be distributed to the Trust and further distributed in accordance with the Trust terms. Unfortunately, these assets may be required to go through probate since they remained in your name and not the name of the Trust. The pour-over will is also useful for distributing personal items such as jewelry and antiques. In addition, the pour-over will is the perfect way to express your intentions regarding who is to have custody of any minor children you may have upon your death, and to create financial safeguards for their future.
A Revocable Living Trust can be an extremely useful estate planning tool for families. Nevertheless, a Trust is a legal document that should be prepared by a proper estate planning professional. It requires knowledge of the law and how particular assets should be handled. When used correctly, it accomplishes all of the goals that most people have in estate planning while additionally making it as easy as possible for their family after they pass away. Most importantly, it allows your estate to avoid the probate process.