A Revocable Living Trust is a type of estate planning instrument, most often used as a Probate avoidance tool. During your life, the Revocable Living Trust holds title to the assets transferred into it. As its name indicates, this type of living trust is revocable, meaning that any assets transferred into the trust can be transferred out of the trust while you are still living. Upon your death, the successor trustee is tasked with distributing the assets of the trust according to the terms of the trust instrument.
There are many advantages to setting up a Revocable Living Trust. Perhaps one of the most important advantages is that a Revocable Living Trust allows your executor to avoid probate court. Because your assets are held by the trust rather than your estate, they are not probate assets and do not need to go through the probate court process before distribution. Not only does this mean that your loved ones can avoid the time-consuming and sometimes complicated process of administering an estate through probate court, but it also allows your beneficiaries to receive distributions sooner.
Additionally, just like a Last Will and Testament, a Revocable Living Trust allows you to dictate exactly what will happen to your assets upon death. The Revocable Living Trust offers great flexibility in instructing not only who will receive your assets, but also when they can receive those assets. More specifically, you can indicate to your successor trustee through the Trust instruments exactly when you want certain distributions to be made after your death.
Lastly, setting up a Revocable Living Trust allows you to keep financial affairs more private. When an estate is administered through probate court, it becomes a matter of public record. Because a Revocable Living Trust allows your trustee to make distributions without involving the probate court, you and your loved ones ultimately retain more privacy after your death.
Many people believe that setting up a simple Will is all that is needed to protect your assets after death and provide for your living loved ones. While it is true that executing a Last Will and Testament is a responsible first step in your estate planning, setting up a Revocable Living Trust adds an additional layer of control over your assets and efficiency in distributions.
If you or someone you know is interested in setting up an estate plan, or learning more about available options, call Lardiere McNair DiNicola & Stonebrook to set up a consultation.
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