Revocable Living Trusts are an excellent way to ensure that your family will receive the assets you've provided for them quickly without the need to go through the probate process.

When you leave an inheritance for your loved ones, you want them to be able to enjoy that gift quickly, with minimal expense or delay. Revocable Living Trusts are an excellent way to ensure that your family will receive the assets you’ve provided for them quickly without the need to go through the probate process.

WHAT IS A REVOCABLE LIVING TRUST? The Revocable Living Trust (or "RLT") is an estate planning instrument that provides the benefits of a trust to your heirs, while still permitting you to control your assets during your lifetime. When you use a Will to provide for your heirs, they must first submit the Will to probate. There are times that this process can cost thousands of dollars in court costs and attorneys’ fees, and it regularly lasts a year or longer. With an RLT, administration can occur quickly, bypassing the probate process and court system entirely. Trusts also offer added privacy for grantors and beneficiaries since, unlike Wills, they do not become public record.

RLTs also offer you a way to determine how your assets are managed in the event that you become incapacitated. Unlike a Will, Trusts offer you the opportunity to detail your wishes for your care should you become incapacitated, while also allowing you to choose someone you can count on to manage your finances as Trustee, and bypass the need for court involvement in the form of a guardianship.

HOW ARE REVOCABLE LIVING TRUSTS CREATED? In a basic Trust, the grantor provides the assets for the Trust, to be managed by the Trustee, for the benefit of the beneficiary. With an RLT, the grantor transfers title of their assets to the Trust, but continues to have access to and control over those assets until their death. Upon passing, the Successor Trustee chosen by the grantor to administer the Trust will distribute the funds to the beneficiaries according to the grantor’s wishes as they are laid out in the Trust documents.

AN IRREVOCABLE TRUST MAY BE A SOLUTION FOR CERTAIN LARGE ESTATES. While RLTs can provide many cost-saving benefits, they do not provide relief from estate taxes. If you have a substantial estate that may be subject to this tax, consider creating an Irrevocable Trust, such as a Grantor Retained Annuity Trust, a Charitable Remainder Trust, or an Irrevocable Life Insurance Trust. Placing assets in an Irrevocable Trust can protect those assets from being subject to estate taxes, and will prevent the income they generate from being attributed to you as taxable income. Unlike the RLT, however, grantors are not able to access the funds placed in an Irrevocable Trust after creation. A lawyer can help you decide if a trust would best fit your needs and if so, what form of trust would be best for you, as well as what other forms of asset protection may be available.

Make sure that your estate plan is crafted by an experienced lawyer so that you can rest easy knowing your loved ones will be cared for in the manner you intended after you are gone. Contact us for a consultation on your estate planning needs at 253.858.5434.