The revocable living trust is the estate planning device that is ideal for the widest range of people. There are many benefits that you should be aware of before you make any decisions, and we will look at a few reasons why you may want to use a living trust in this post.
You want to maintain control of your assets.
A lot of people think that you surrender control of assets that you convey into a trust, but this is not always true. You relinquish some degree of control with certain types of trusts, but the dynamic is different with a revocable living trust.
The name of the trust reveals one level of control: if you ever choose to do so, you dissolve the trust entirely and take back personal possession of the property. However, since you are using the trust to achieve your estate planning goals, it is unlikely that you would want to do that.
There is actually no loss of control while the trust is intact, because you would act as the trustee, meaning you have full control of all assets and of all decisions concerning those assets. In the trust declaration, you would name a successor trustee to assume the role after your passing. Moreover, you continue to have full use of all of the trust assets during your lifetime.
You want your loved ones to receive their inheritances in a timely manner.
If you use a will as your asset transfer vehicle, you would name an executor to act as the administrator when the time comes. The executor would not be able to act independently without court supervision.
After your passing, the will would be admitted to probate, and the Surrogate’s Court would supervise during the administration process. Probate will typically take close to a year to run its course, and typically no inheritances are distributed until the estate has been probated by the court.
On the other hand, if you use a living trust, the transfers are not subject to the probate process. As a result, there is no long procedural waiting game for the beneficiaries to play before they receive their inheritances.
The administration process is more efficient when a living trust is used as an alternative to a will. The trust would own all the assets that would be subject to probate if they were not held by a trust, and the consolidation of ownership will make life easy for the trustee.
You want to include spendthrift protections.
When you have a living trust, you can protect a spendthrift heir. You can include a spendthrift provision, and the trust would become irrevocable after your death.
The beneficiary would not have access to the principal, and the beneficiary’s creditors would “step into their shoes” in a legal sense. They would have the same access to the funds as the beneficiary, which is no access at all.
You do not have to instruct the trustee to distribute a lump sum inheritances all at once. When you are drawing up the trust declaration, you can allow for limited incremental distributions over time to prevent reckless spending.
You want to create a joint estate plan with your spouse.
If you and your spouse are on the same page and you own a lot of property jointly, a shared living trust can be an effective estate planning centerpiece for your family. You and your spouse would act as co-trustees, and the survivor would be the sole trustee.
Though there are other possible ways to construct the trust, the surviving spouse would typically inherit the jointly held property. Each individual can convey their separate property into the trust as well, and you can name one another as the beneficiaries, but this is not required.
You want to account for possible incapacity.
A very significant percentage of elders become unable to handle their own affairs at some point in time. When you have a revocable living trust, you can account for this possibility.
The successor trustee or someone else that you choose can be empowered to assume the role in the event of your incapacity.
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We are here to help if you are ready to work with a Rochester, New York estate planning attorney to develop your estate plan. A living trust may be the right choice, but we will gain an understanding of your unique situation and make the appropriate recommendations.
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