A revocable living trust is a popular estate planning tool that you can use to determine who will receive your property when you die. Most living trusts are revocable because you can change them as your circumstances or wishes change. Revocable Living Trusts Are Alive Because You Create Them During Your Lifetime. A Revocable Living Trust Can Be a Powerful Estate Planning Tool.
Generally, a revocable living trust is a type of trust that can be canceled at any time and the grantor of the trust is both the trust and the beneficiary (allowing control of the trust assets). 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 can include a statement in the trust stating that it cannot be modified or revoked. This makes it an irrevocable living trust. However, the law allows even irrevocable trusts to be modified or revoked in certain circumstances. If you include a paragraph in the trust that says it can be changed or revoked, then it is called a “revocable living trust.”.
However, because it is a living trust that is revocable, you retain control of assets, even if they no longer belong to you, as long as you are alive. The living trust allows you to make changes (or amendments) to the trust document while you are alive, at your own discretion. With a living revocable trust, assets can be distributed to the grantor and, upon death, a “successor trustee” distributes the assets in accordance with the trust's statutory dictates. Contrary to popular belief, revocable living trusts offer very little asset protection if you retain an ownership interest, such as appointing yourself as a trustee.
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. After creating a revocable trust, the assets must be re-titled in the trust's name because assets that are not formally held in the trust still have to go through probate and will not be under the management of a successor trustee in the event of disability. To create a revocable living trust, you must complete a revocable living trust form appropriate for your state. By providing flexibility and privacy, revocable living trusts can be a valuable part of your estate plan.
Upon death, assets held in the revocable trust evade succession, meaning that assets can pass to heirs without involving the courts, which can be time-consuming and costly. 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. 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. With a revocable living trust, you do most of the work upfront, making the disposition of your estate easier and faster.
A revocable living trust allows you to maintain control over the assets you have placed in the trust, but there are certain circumstances in which an irrevocable living trust is the best option. A living revocable trust is a legal document created during its lifetime that allows the grantor or creator to re-title assets in the trust's name and select a trustee to manage the trust assets for their benefit (and their beneficiaries). . .