A revocable living trust is a legal document that allows you to transfer property to a person or entity—a trustee—that will manage them for the benefit of another person or entity—trust beneficiaries.
As the name suggests, the document is revocable—meaning you can change it anytime, like adding or subtracting assets, changing beneficiaries, or revoking the trust altogether. As the trust maker—the grantor—you can set special provisions to control the management and distribution of assets to your beneficiaries in case of death or incapacity.
The trustee is the person or institution that manages your trust assets. A trustee can be a bank, an attorney, a family member, or even yourself. The trustee’s responsibility is to manage and control the assets of your revocable trust for you and for those who inherit from you.
If something happens to the trustee, you can designate successor trustees to step in under the terms of the trust to manage the assets.
The trustee must keep a record of every transaction made by or with funds from your revocable trust, including all income earned on those funds. And when the time comes, they’ll be responsible for administering your trust to your beneficiaries.
Revocable living trusts are great asset protection vehicles, sheltering your assets while you’re here and protecting them from the courts once you’re gone.
Revocable trusts are good for:
A revocable trust can be a useful estate planning tool and an efficient way to leave money to your heirs.
An irrevocable living trust is also a type of trust that can be started during your lifetime. It shares many of the same benefits as a revocable trust, with the main difference being that an irrevocable trust can’t be changed or revoked once it’s created. It’s often used by people who have significant assets and want to protect those assets from creditors, lawsuits, estate taxes, or other claims against them.
Both types of trusts allow you to protect your assets for your future beneficiaries but deciding which type is best for you will depend on which benefits are most important to you.
Whether you are young or old, rich or poor, married or single, if you own titled assets such as a house and want your loved ones to avoid probate court at your death or incapacity, consider a revocable living trust.
A trust allows you to bring all of your assets together under one plan. Of course, there is no single strategy that is right for everyone. Whether a revocable living trust is right for you will depend on your unique circumstances.
As with any legal document, certain rules and regulations must be followed in order to keep them valid and enforceable. To maximize the benefits of your revocable trust and ensure it meets your long-term goals, you should work with a Santa Barbara estate planning attorney at Santa Barbara Estate Planning & Elder Law.
To explore your options, book an estate planning session today!
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