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.
A revocable trust allows money to be available immediately after death. The trustee will be able to use the money to pay estate taxes, administrative expenses and debts. The trust must be created when the sick person considers himself mentally capable of accepting the document. Otherwise, it will not be legally binding.
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. A revocable living trust is a powerful tool to begin the estate planning process. Offers flexibility you can't get from other trusts or wills.
This is especially useful for people who are just starting to plan their wealth and are not yet sure who exactly to name as beneficiaries. By placing assets (such as a home, cabin, or business interest) in a revocable trust, or by naming the trust as a beneficiary in non-probative accounts, such as life insurance or brokerage accounts, your assets will be distributed according to your wishes and done so without judicial oversight. Since the grantor continues to maintain control of a living trust, with the ability to modify or cancel it at any time, all assets in the trust are considered to be the property of the grantor. A living trust can be an effective estate planning tool if you understand what you can and cannot achieve.
Regardless of your net worth and, in particular, if any of your assets are titled in your exclusive name, you should consider a revocable living trust if you provide for the need to plan for possible mental disability. 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. 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. Unlike an irrevocable trust, which generally cannot be revoked or modified, a revocable trust offers flexibility for the life of the trust creator.
Having the necessary retirement savings and a financial plan will allow you to live the kind of life you want to live during your golden years. If you rely on a trust for most of your personal assets, real estate experts recommend that you have at least a basic will to declare who should inherit any property that is not in your trust. Revocable trusts should not be confused with irrevocable trusts, which are generally used to withdraw assets (such as life insurance policies or family business shares) from an estate, often for tax purposes. If you are looking for a living trust to help reduce the tax burden on your estate, you should look elsewhere.
It is commonly recommended that, if you create a living trust, you also have what is called a dumping will. You can stipulate the living situations and spending habits of minor children in the terms of your trust. You can also create an irrevocable living trust, but this type of trust cannot be revoked or changed, and such a trust is done almost exclusively to produce certain tax or asset protection results, which are beyond the scope of this summary. .