A revocable living trust is a powerful estate planning tool that allows individuals to manage their assets during their lifetime and dictate how those assets will be distributed after their death. Unlike a will, which only takes effect upon death and must go through the probate process, a revocable living trust can help avoid probate and provide more control over asset distribution. Here’s a closer look at what a revocable living trust is and how it works.
What is a Revocable Living Trust?
A revocable living trust, often simply called a living trust, is a legal document that creates a separate entity to hold your assets. You can transfer ownership of your property—such as real estate, bank accounts, investments, and personal belongings—into the trust while retaining control over those assets during your lifetime. The term “revocable” means that you can modify or revoke the trust at any time as long as you are alive and mentally competent.
How Does a Revocable Living Trust Work?
- Creation of the Trust: To establish a revocable living trust, you will need to draft the trust document, which outlines the terms of the trust, including how assets will be managed and distributed. It’s advisable to work with an experienced estate planning attorney to ensure that the document complies with state laws and accurately reflects your wishes.
- Funding the Trust: After creating the trust, you must transfer your assets into it. This process is known as “funding” the trust. You will need to retitle assets such as real estate and bank accounts in the name of the trust. This step is crucial because only assets held in the trust will avoid probate.
- Management During Your Lifetime: As the grantor (the person who creates the trust), you can act as the trustee, allowing you to manage the assets within the trust just as you would if they were in your name. You can buy, sell, or change assets in the trust without any restrictions.
- Distributions After Death: Upon your death, the successor trustee—whom you designate in the trust document—will take over management of the trust. The successor trustee is responsible for distributing the assets according to your instructions outlined in the trust document, without going through probate. This can save time and reduce costs for your beneficiaries.
- Privacy: One of the significant advantages of a revocable living trust is that it allows for privacy regarding asset distribution. Unlike wills, which become public records during probate, trusts do not go through this process, keeping your financial affairs confidential.
Benefits of a Revocable Living Trust
- Avoids Probate: Assets held in a revocable living trust do not go through probate, which can be time-consuming and costly.
- Flexibility: You retain control over your assets during your lifetime and can modify or revoke the trust as needed.
- Efficient Management: A successor trustee can manage and distribute your assets quickly after your death.
- Privacy: Trusts provide confidentiality regarding asset distribution.
A revocable living trust is an effective estate planning tool that offers flexibility and control over asset management during your lifetime while simplifying distribution after death. It helps avoid probate and ensures that your wishes are honored without unnecessary delays or costs.
The Eastman Law Firm specializes in helping individuals create comprehensive estate plans, including revocable living trusts tailored to their unique needs. To learn more about establishing a revocable living trust or to schedule a consultation, you can contact:
Name: The Eastman Law Firm
Address: 4901 W. 136th Street, Ste. 240Leawood, Kansas66224
Phone Number: (913) 908-9113
Website: www.theeastmanlawfirm.com