A revocable living trust allows you to access assets during your lifetime but have those assets pass outside of probate to your beneficiaries after you pass away. Depending on your estate planning objectives and your needs today, consider using a revocable trust as part of your estate plan.
Like other types of trusts, a settlor creates a revocable living trust using a trust document that specifies a trustee to manage the assets and beneficiaries to receive the benefit of the assets. The key to creating a revocable living trust is that the settlor can revoke or modify the trust before his or her death. The trust document explains this power of revocation or modification. You also may hear a revocable living trust referred to as a living trust, a revocable inter vivos trust, or a revocable trust.
While the settlor is living, he or she has control over the assets placed in trust. The settlor can move assets into or out of the trust at any time. In addition, the trust continues even after the settlor passes away. The trustee or successor trustee continues managing any assets held by the trust, and the beneficiaries can continue to receive distributions. Unlike a will, a revocable living trust does not have to go through the probate process,.
Most revocable living trusts name the settlor as the trustee during his or her lifetime. Some appoint a different trustee. The trustee can be you, a spouse, a friend, a relative, an individual private professional fiduciary, or an institution such as a bank or a trust company. Whoever you choose as trustee, he or she owes fiduciary duties to the beneficiaries, such as the duty to prudently invest trust assets for the benefit of the beneficiaries.
Your trust document should specify a successor trustee who will take over administration of the trust when you or the initial trustee pass away or become incapacitated. Further, your trust document should specify how and when the trustee can make distributions to the beneficiaries.
People considering setting up a revocable living trust should retain an estate planning attorney to draft the trust document. As mentioned above, the trust document needs to include several legal provisions to become effective. The settlor must sign the trust document and have it notarized. Finally, the settlor must transfer assets into the trust by changing title or moving assets to the trust. An estate planning attorney can help you meet all legal requirements to ensure your trust corresponds with your intent.
Planning your estate? Angela Klenk, Esq. and the team at Beach Cities Estate Law couple personalized attention to your estate plan with big law firm experience for a winning combination to give you peace of mind. To schedule a case evaluation, visit Beach Cities Estate Law online or call (424) 400-2125.