You’ve managed your assets throughout your life, so it only makes sense that you’d like some degree of control over what happens to them after your death. While most people have heard of an old-fashioned will, there are several estate-managing tools that may be a better fit for you, depending on your goals. One option is called a revocable living trust. Working with an estate-planning lawyer, you can easily set one up and meet your personal asset planning goals. Here are basics about this estate-planning tool.
What is a Revocable Living Trust?
A trust is best described as a fiduciary arrangement between three parties that allows the first party to transfer a property to a second party to benefit a third party. An example might be if assets are handed over to a trustee by parents, to benefit a child later. The “living” part of a trust has to do with assets placed in a trust during your lifetime, and transferred to designated beneficiaries when you die. Finally, a revocable trust simply means that you can change the trust as your wishes change.
Benefits of a Revocable Living Trust
This estate-planning tool has grown popular because it brings some unique benefits. For one, it allows you to avoid probate – the court-supervised distribution of assets after a death. That process can be time-consuming, expensive and frustrating for your survivors. Property left through a living trust passes to beneficiaries without court involvement.
A revocable living trust also is less subject to messy court challenges from your survivors. If one were to sue, they would have to prove that you were mentally incompetent when you established the trust or that the trust document is flawed. This rarely happens so you can rest assured that your wishes for the management of your assets will most likely be honored.
Establishing a revocable living trust is as simple as speaking to an estate-planning attorney to have the document made. Next, the trust maker must transfer assets into the trust, which usually just means including a list of property within the written trust.
Is It Right for Me?
Choosing the proper estate-planning tool isn’t something you do on a whim. There are pros and cons of each tool and choosing the wrong one has serious implications. Deciding on a will, a revocable living trust or some other arrangement is something that should be done with skilled legal guidance. Call an estate-planning attorney today to learn how you can prepare for the future.