A revocable living trust document is one of many estate planning tools available. In its simplest definition, it is a written document determining how your assets will be handled after passing. These assets can include:
Just like all living trusts, you create a revocable living trust during your lifetime. Most living trusts are “revocable,” meaning you can change or cancel the provisions you outlined at any time. However, upon your passing, the terms of the trust will become irrevocable, and the trust assets will be transferred to the beneficiaries according to your last written designations.
As the creator of a trust (or grantor), you can transfer your personal property to the trust’s ownership. While the trust owns the assets, the grantor is permitted to use them as they usually would until their passing. This includes continuing to live in their home, driving in their car, or making financial decisions. As the grantor of this trust, it is generally advised to place as many assets into that trust as possible to take full advantage of the benefits it provides. However, not all assets owned are eligible for transfer to a revocable living trust. Some assets that are not transferable are life insurance and Individual Retirement Accounts (IRAs) since these accounts require you to name a beneficiary. Even though there are some restrictions on this trust, the benefits outweigh the drawbacks for many people. The top benefits of a revocable living trust include the following.
One great benefit of a trust is that they are not set in stone — you can make changes whenever you have a significant change in circumstance. This flexibility allows you to start your estate planning process at a young age.
A revocable trust can even prove beneficial before your passing. For example, if you ever become incapacitated, your successor trustee can automatically manage your financial affairs. This takes away the need to go through court proceedings or appoint conservators.
One of the most significant benefits of this trust is avoiding probate. Probate is the court-supervised process of finishing up a person’s estate. The Texas probate process can be expensive and time-consuming. If possible, it is best to avoid it.
After your passing, a will becomes public record. In comparison, estates inherited via a living trust are distributed privately. This means no one can search public records to discover who your beneficiaries are and what they inherited.
Revocable trusts are an extremely common estate planning tool due to their many benefits for individuals and their families. Just about anyone would likely benefit from creating this type of trust. However, it is especially beneficial for individuals just starting their estate planning or those unsure which beneficiaries will receive all their assets.
You should consider creating a revocable trust if:
While you do not technically need a lawyer to create a revocable living trust, working with one is in your best interest. An experienced estate planning attorney can help you navigate creating your trust seamlessly. If you have more questions about creating a trust, consult a qualified estate planning lawyer today.
Whenever you need to reach out to our office, you can be sure you won’t need to wait for hours or days to get a response. Here at Stafford Law Firm, we pride ourselves on being easily accessible and responding to all client inquiries as soon as possible. The fact of the matter is, one day, you will need to fall back on your estate plan. Whether it is simply to pass on your family’s wealth after you die or something even more heartbreaking like needing a new guardian appointment for your children, having a thorough and customized plan in place will help ensure your family and your future are well taken care of. This plan could need to include a revocable living trust, and you can rest easy knowing that an experienced Houston trust lawyer has your best interests at heart.
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For the most part, the advantages of revocable living trusts outweigh the disadvantages, but the disadvantages still exist. Some of the potential disadvantages include:
It does not provide tax benefits
There is no significant asset protection with a revocable trust
There is a lot of paperwork and record-keeping involved
In a revocable living trust, the trustee is the owner of any and all property in the trust.
There are several benefits to setting up a revocable living trust, but the main purpose of this document is to help your heirs avoid the long and stressful probate process, as well as protecting their privacy.