3 Benefits of Drafting a Revocable Living Trust
If you’re a serious planner, you might be thinking about how your assets will be handed off to your friends and family when you pass away. You’ve likely heard about Wills, but is a trust the better route for maintenance and distribution of your assets?
Trusts, as an overview, are estate-planning instruments that allow you, the trustor, to place your assets, investments, and other property into one place. Someone you feel is trustworthy, often a family member or friend, is appointed as the successor trustee to distribute your assets to beneficiaries you selected when the trust was created.
Trusts are able to accomplish certain things that Wills are not. More specifically, a revocable living trust (RLT) is a specialized estate planning tool that affords you certain luxuries that other types of trusts do not.
Here are four advantages of having a revocable living trust:
1. It’s able to be modified as circumstances change
By definition, “revocable” means able to be revoked. Therefore, the terms in the RLT may be revoked or modified as your situation changes. The word “living” is included because the RLT is drafted while you’re living and have sufficient mental capacity. As long as you have mental capacity, you are legally able to remove, add, or sell assets originally placed in the trust. You can even dissolve the trust altogether.
2. Gives families privacy over the decisions
When a family member dies, you often hear about families fighting over the allotment of assets — even when the deceased lays out his or her wishes. This is often due to the Will’s contents becoming public, airing potential dirty laundry.
A revocable living trust, however, is under no legal obligation to become public once the trustor passes away. Therefore, your successor trustee can quietly pass on assets to your beneficiaries with dignity. Many celebrities and other high-profile figures use trusts for this reason, as their beneficiaries might not want the full extent of their inheritance publicized.
3. Avoids probate
Yet another plus that RLTs offer is that, like all trusts, your surviving friends and family members don’t have to spend time and money navigating the probate court system. Wills, even valid ones, must go through the probate process, thus delaying the distribution of assets to your beneficiaries. In cases where a trust contains a business or other asset that requires constant supervision, the successor trustee can quickly step in and manage the entity so it doesn’t unnecessarily lose value.
Creating Your RLT
As uncomfortable as it might be facing the reality of a world without you, it will be difficult for your surviving family and friends to handle your estate if you fail to leave some kind of trust in place. We can help you with a plan and see if a revocable living trust is right for your situation and wishes. Contact us today!