Plan your estate with revocable living trust
Have you felt the need of estate planning? Are you looking for a simple yet effective estate planning tool? If so, one of the best options that could be considered is the revocable living trust. Revocable literally means something that can be revoked or cancelled. The revocable living trust is a trust created in your lifetime to manage your assets, and the trust has the flexibility of being revoked or cancelled at any point of time.
The person creating a revocable living trust is called the grantor or trustmaker, and he is the one who controls and manages the assets. There may be cases when the grantor prefers to have an attorney or an institution to oversee the trust’s activities.
How does it work
The trustmaker creates the trust with legal formalities that include preparation of documents consisting of the asset details and the trustee details. The trust documents also have the name of the beneficiary who would take charge of the trust under two conditions:
- When the trustmaker becomes mentally ill
In this case, the successor trustee takes over the charge on the trust and manages all the affairs related to the assets and their finances. - When the trustmaker dies
In the case of an uneventful death of the trustmaker, the benefits of the trust are transferred to the successor trustee. He takes charge. However, he must distribute the assets and the benefits according to the will of the trust’s grantor.
Reasons to opt for a revocable living trust
Free from the costs and hassles of a probate court
Any property that is not jointly held, does not have a beneficiary and is not placed in a trust must go through a probate process upon the death of the owner. However, when the asset is placed in a trust that is created during his lifetime, a probate process is not needed when the person is dead. The beneficiary gets the rights over the asset and is free to settle it down outside the probate courts. Hence, many prefer to have a revocable living trust to avoid the overheads and hassles of a probate court.
Flexibility in managing your assets
The living trusts are revocable. Hence, you have the flexibility of amending, modifying, and terminating the trust during your lifetime. Also, if you find it difficult to manage the trust, a legal trustee can be appointed to handle the affairs of the trust.
Privacy
Unlike a will, which is a public document, the trust formalities are completely private and are not disclosed to anyone other than the beneficiaries. This is particularly appreciated by many as bitter experiences over the distribution of assets can be avoided.