Without a revocable living trust, when you die, your loved ones will have to go through probate proceedings in every state where you own a property. Putting real estate outside the state of Texas on an RLT ensures that your loved ones save time and money by not having to go through probate in other states. Revocable trusts are a good option for those who care about keeping records and information about private assets after your death. The probate process to which wills are subject can make your estate an open book, as the documents entered into it become public records, available for anyone to access.
Anyone who is single and has assets titled in their exclusive name should consider a revocable living trust. The two main reasons are to keep you and your assets out of a court-supervised guardianship and allow your beneficiaries to avoid the costs and hassles of probate. The trust must be created when the sick person considers himself mentally capable of accepting the document. Otherwise, it will not be legally binding.
Your revocable living trust protects you in case you become mentally incapacitated. All of your assets are already controlled, owned and managed by the trust, and a guardianship proceeding may not be necessary. While a permanent power of attorney may be refused, a trust cannot be. Your financial life is protected by the trust.
A living trust (also called an inter vivos trust) is simply a trust that is created while you are alive. Beneficiaries you name in your living trust receive trust ownership. Instead, you could use a will, but wills must go through the court process that oversees the transfer of your property to your beneficiaries. So, let's look at this concept of a revocable living trust and find out if it's exact representations and find out if you really need it.
So we'll go back a second and look at a trust itself. What is trust? It's not difficult, it's simply a way to maintain ownership and it involves three players. Usually, when I have my property, I am the only player, but if I decide to put my property in trust, the name I assume is the trust of the trust. Some people will call it a grantor, others will call it a trust, okay.
I'm going to call myself the settler. Compare this to a revocable living trust, which is a private contract between you as a trustee and you as a trustee. A living trust can be used to help control a guardian's spending habits for the benefit of their minor children. In these situations, parents should consider establishing a revocable living trust and naming the trust as the principal or contingent beneficiary of the life insurance or retirement account.
In other words, after the lawyer has drafted the trust and the client has signed it, the client and the lawyer must work together to fund the trust. Of course, if you need a revocable living trust, be sure to fund your assets in your trust and update your beneficiary designations; otherwise, your trust will not be worth much less the money you spent on it. A revocable living trust (also called an inter vivos trust) offers a variety of benefits as an estate planning tool. Therefore, if you are worried about memory loss or disability in old age, creating a trust can help you put your affairs in order, appoint someone you trust to monitor your desires and reassure you.
If you establish a living trust and legally place property in the trust, that property will no longer be subject to probate supervision. If a person anticipates a will bankruptcy, it is likely best to create and fund a revocable living trust for two main reasons. While the RLT is not a good tax minimization tool on its own, provisions can be included in the trust documentation to transfer wealth by establishing a credit shelter trust in the event of your death. But this victory for you comes at a high cost to your family, who must take care of everything without the benefit of knowing your wishes or the legal protections that would have accompanied a living will or a revocable trust.
While establishing a revocable living trust has many advantages, there are also some drawbacks. When you create a revocable trust with your spouse or domestic partner, the spouse or domestic partner has authority over all assets in the trust. This document states that if an asset is discovered that is not in your trust after your death, it will go to your trust. Find out the right way to fund your trust to achieve its goals and what assets you shouldn't transfer to your trust.