One of the estate planning devices that is commonly used to arrange for the transfer of financial assets is the revocable living trust. This tool is utilized by people who would like to avoid probate.
What is probate and why would you want to avoid it? Those are good questions that we would like to answer here.
Probate is a legal process, and it takes place under the auspices of the probate court. During this period the business of the estate is conducted. This can include paying final bills, including taxes, and if anyone wanted to contest the will they would do so during probate.
Expenses pile up during probate, and it can take months or even years for the process to become complete. This is why people often times try to avoid it.
While probate avoidance is the primary reason why individuals utilize living trusts these instruments are also useful for those who are planning ahead for the possibility of future incapacitation.
You may be surprised to hear about just how widespread Alzheimer’s disease is these days. About 45% of people who are 85 years old or older are suffering from the disease. Alzheimer’s can strip sufferers of their ability to make sound medical and financial decisions.
When you create a revocable living trust you are generally going to act as the trustee while you’re still alive so you have total access to and control over the funds. However, you can name a successor or disability trustee who would be empowered to administer these funds in the event of your incapacitation.