If you have traveled in estate planning circles, the term Revocable Living Trust may be familiar to you.
Revocable means that the Trust can be changed by you – the “trustor” – at any time. You can also cancel or revoke the Trust if you choose.
This type of Trust is created while you’re alive and benefits both you and your heirs.
There are three basic stages to a Revocable Living Trust:
While you’re living and are of sound mind, you can continue to manage the assets within your trust. You’ll be the primary beneficiary of those assets and you have complete control over all aspects of the Trust.
If you should become mentally disabled, your Trust will enter the second stage. When you create your Trust agreement with your attorney, you will be required to name a Successor Trustee in the event that you can no longer serve. In the event you become disabled, your Successor Trustee will step forward and control all assets in your Trust in accordance with your original trust documents.
Upon your death, your Trust will enter the third and final stage of the Revocable Living Trust process. This is the settling of your estate. During this step your successor trustee will use the Trust to pay off estate debts, file and pay taxes, and pass remaining property to designated beneficiaries. This final step is much like the probate process, except that it can happen more quickly and remains private.