A lot of people think that trusts are only used by very wealthy families with estate tax concerns. In reality, this is not the case when it comes to the revocable living trust, and we will look at the benefits here.
No Loss of Control
The first thing that we want to establish is the fact that you maintain direct personal control of assets that you convey into a revocable living trust. You would act as the trustee and the beneficiary while you are alive and well, and as the name would indicate, you would be able to revoke the trust at any time.
In the trust declaration, you would name your heirs as the beneficiaries, and you would designate a trustee to assume the role after your passing. This can be someone you know personally, and you can alternately engage a trust company or the trust department of a bank.
A will would be admitted to probate, and the court would provide supervision during the estate administration process. Final debts would be paid, and if anyone wanted to challenge the validity of the will, they would have an opportunity to make their case.
Though it serves a purpose, the probate process comes with some drawbacks. It will take about eight months at minimum, and no inheritances are distributed until the estate has been probated and closed by the court. Probate expenses reduce the value of the estate, and the records are available to the general public.
If you use a living trust as the centerpiece of your estate plan instead of a will, the trustee would be able to distribute assets to the beneficiaries outside of probate.
You do not have to leave lump sum inheritances with no strings attached when you have a living trust. If you choose to do so, you can instruct the trustee to provide incremental distributions over an extended period of time. The living trust can include a spendthrift provision that would protect the principal from the beneficiary’s creditors.
Alzheimer’s disease strikes almost a third of people that are 85 years of age and older, and it is not the only cause of cognitive impairment. Physical health problems can also lead to incapacity.
To account for this, you can designate a disability trustee when you establish the trust agreement. This individual or entity would act as the trustee if you become unable to manage the trust on your own.
Consolidation of Assets
When you fund the trust, you have complete control, but you make the trust the owner of the assets. This consolidation helps to facilitate a streamlined, efficient estate administration process.
Attend a Free Seminar
We are conducting a number of seminars over the coming weeks, and they are being held at strategic locations throughout our service area. You can walk away with a great deal of useful information if you join us for one of these sessions, and they are being offered on a complimentary basis.
Though there is no charge, we ask that you register in advance so we can reserve your spot. You can see the schedule and obtain more detailed information if you visit our seminar page.
Need Help Now?
If you already know that you are ready to discuss your estate planning objectives with a licensed attorney, we are here to help. We have taken all the necessary steps to keep our office environment safe in light of the novel coronavirus, and we also offer remote consultations.
You can set up an appointment right now if you give us a call at 860-548-1000 and we have a contact form you can fill out if you would like to send us a message.
- Exploring the Tax Benefits of Charitable Trusts - September 14, 2023
- The Ripple Effect of Dying Without a Will or Trust - August 29, 2023
- Will an Unwitnessed Handwritten Will Hold Up in Court? - August 10, 2023