The main benefit of creating a revocable trust is that it provides a pre-established mechanism that will ensure the ongoing management and preservation of your assets, should you become disabled. You can also set all the dispositive provisions of your estate plan. 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.
A revocable living trust is a popular estate planning tool that you can use to determine who will receive your assets when you die. Assets within a trust are usually things like a house, life insurance, retirement plans and more. Switching assets to a revocable trust won't save income or estate taxes. While assets held in an irrevocable trust are generally out of reach for creditors, that is not true with a revocable trust.
A trust can be revocable, which means I can revoke it. It also means that I can change it. So if I don't like the way I'm doing in life, I'll just change it. That is one of the beauties of this revocable trust.
Other trusts are irrevocable, and there are some definite estate planning needs for an irrevocable trust, but we won't talk about that today. Now my trust can also be established while I am alive and that is why it is called a living trust. Another type of trust is called a testamentary trust, that is the one that was established in my will and again we will save the testamentary trust for another day. You should also be aware that revocable trusts do not offer the same type of protection that irrevocable trusts offer creditors.
A revocable living trust can also give your loved ones almost immediate access to cash during a difficult time. The trust remains in operation after the death of its grantor, and may transfer its assets to any person provided by the grantor in the trust formation documents, in accordance with the grantor's own terms. In addition, living trusts avoid the probate process, reduce the possibility of a court dispute, and maintain the privacy of your documents. Also remember that the law governing revocable trusts and other types of trusts may vary by state.
As if I had a vacation home here, they realize how hypothetical all this is, and then I have my other house there, and my third home somewhere else, that's a good use of the revocable trust, because again my son doesn't have to go to every state and legalize my will, but my son just uses the trust to transfer the ownership. This means that, since the assets of a revocable trust still belong to the trust, creditors could go after the assets to satisfy a judgment. Radford has been a professor of law at Georgia State University since 1984 and was president and member of the American College of Trust and Estate Counsel, which specializes in wills and trusts and elder law. Writing a living trust usually requires more funds and effort upfront because it is a more complex legal document than a regular trust or will.
Revocable living trusts have advantages and disadvantages, from avoiding probate to the costs associated with creating a. They should be sure enough if you show them a copy of your trust document, which specifically gives you, as a trustee, the power to borrow against the trust property. For example, if you want to put your house in your living trust, you must prepare and sign a new deed, transferring ownership to you as a trustee of the trust (or, in Colorado, to the trust itself). Here are some factors and situations to consider when deciding if you need a revocable living trust rather than a simple will.
The income earned by the trust assets goes to you and is taxable, but the assets themselves are not transferred from the trust to your beneficiaries until your death. While a living trust is an estate planning tool, such as a will, it gives you more flexibility in deciding what happens to your money and other assets during your lifetime and beyond. . .