A revocable living trust is a legal document that places your assets—investments, financial accounts, real estate, vehicles, and personal belongings—into a trust for your well-being during your lifetime. It outlines the desired distribution of these items after your passing. Being revocable, you retain the ability to modify or terminate it while alive, maintaining complete control over your assets within the trust. Unlike a will, you appoint yourself as the trustee (with spouses possibly as co-trustees), ensuring ongoing control and flexibility. Notably, you designate a ‘successor trustee’ to execute your wishes upon your passing, swiftly transferring assets to beneficiaries. In the event of incapacity, the successor trustee manages financial affairs and controls assets on your behalf. This arrangement is straightforward, involves no court intervention, and stands in contrast to the complexities associated with wills.
2 main benefits—bypassing probate and guaranteeing privacy
A potential drawback— it’s cost
An important stipulation—you must fund it
To acquire the benefits of a trust, you must place your assets in it. Meaning retitling your property and accounts in the trusts name. Your attorney might be able to take care of some of this on your behalf, but when not, you need to make sure to do this yourself. You ought to also devise a “pour over” will. This basically declares that any assets that aren’t already in the trust need to be included at time of your passing.
An intelligent solution for a lot
A living trust is not completely necessary for all of us but it will definitely help if, for example, you have a large amount of assets, you are the owner of property in different states, or you have an extended family where things might get more complex. Additionally, it isn’t a question of the amount of capital or property you have. It is what will give you the greatest guarantee that your assets will be allocated in accordance with your wishes, and that the process will be as streamlined and effortless as possible for your successors.
