A revocable living trust is a very popular estate planning and asset protection tool. There are many reasons why you should consider the creation of a revocable living trust in order to protect your financial security and your legacy. There are also limitations as to what exactly a living trust can do.
Nirenstein, Horowitz & Associates can assist you in determining if creating a revocable living trust is a good decision given your personal, financial, and family situation. Our legal team can also help you with following the formalities of creating your living trust. To find out more about the ways in which we can assist with the trust creation process, give us a call.
4 Key Reasons to Create a Revocable Living Trust
There are lots of reasons why creating a revocable living trust may be a good decision for you. Four key reasons you may want to create this type of trust include the following:
- Avoidance of probate: The probate process is time consuming and costly. When assets are held in a living trust, those assets can typically transfer outside of probate. Probate could possibly be avoided entirely with the right estate plan. Even if some wealth has to be transferred through probate, at least your heirs or beneficiaries would be able to inherit trust assets more quickly.
- Facilitating management of assets in case of incapacity: When you create a revocable living trust, you name a backup trustee so that backup person can immediately control trust assets if you become incapacitated.
- Allowing heirs or beneficiaries to inherit faster: The trust administration process can be much faster than the probate process so new owners of assets held in the trust can take possession of property much more quickly. This can be very important to protect wealth, especially in situations where the assets being inherited need to be carefully and expertly managed.
- Giving you more control and maximizing the chances your wishes will be respected: A will can typically be contested more easily than a living trust since you usually create a revocable living trust and then remain involved in managing the trust during your life. This makes it a lot more difficult for anyone to argue after you’re gone that the trust wasn’t a true reflection of your wishes for an inheritance.
Depending upon your situation, a revocable living trust may also provide you with other important benefits and protections. Let Nirenstein, Horowitz & Associates provide you with advice on what kinds of trusts and other legal tools you should be using to protect your financial security and to ensue your legacy is safe.
Limitations of a Revocable Living Trust
While a revocable living trust can help you to accomplish many important estate planning and asset protection tasks, this type of trust is not going to provide full protection from all possible risks. Because you still largely retain control over the assets held within a revocable living trust, those assets still essentially belong to you for various legal purposes, even though the trust is actually the owner.
The fact that trust assets are still considered “yours” in some sense is the biggest downside and limitation because it means a revocable living trust does not protect the assets against creditors and it also does not help you to keep the trust assets safe if you need to go into a nursing home and you want to qualify for means-tested Medicaid coverage to pay for your nursing home care.
A revocable living trust is also not going to protect the trust assets from being considered a countable part of your estate upon your death. While the trust assets can pass outside of probate through trust administration, the assets are still going to count for purposes of assessing the estate tax bill that has to be paid following a death.
An experienced attorney can explain limits of a revocable living trust as well as providing you with insight into the benefits this kind of trust can provide. If you want protections that a living trust cannot offer you, your attorney can also help you to explore other kinds of trusts you could potentially create.
Getting Help from A Connecticut Trusts Lawyer
A Connecticut trusts lawyer can provide assistance with the creation of a revocable living trust and with the creation of other kinds of trusts providing various additional protections. Our legal team knows how important asset protection and legacy planning is to you and we help you to use living trusts to accomplish your goals.
To find out more about how trusts can be used as part of your plans for the future, download our free estate planning worksheet. You can also give us a call at 860-548-1000 or contact us online to get personalized advice on the process of protecting your wealth and your family.