Estate Planning Tools: Living Revocable TrustsFebruary 08, 2016
The flexibility allowed by a living revocable trust is what entices many individuals to set them up. Learn how you can benefit.
A living revocable trust, sometimes called an “inter vivos” trust is a widely used estate planning tool, briefly mentioned in our recent blog, “When Should I Set up a Will and Estate Plan?” This document will serve to determine who will inherit your property when you pass away, and can be adjusted depending on how your life or desired beneficiaries change over time, hence the inclusion of “revocable” in the name.
What is a living revocable trust?
A living revocable trust is a written legal agreement through which your assets are placed into a trust for your use during your lifetime and then transferred to designated heirs at your death, or incapacitation, by your selected “successor trustee”.
Is a living trust different from a will?
Yes, in many ways. Read our blog, “Demystifying Wills and Living Trusts” for a full comparison of the two estate planning options.
Do I still need a will if I have a living trust?
You still need what’s called a “pour-over” will that covers both the disposition of any assets you did not previously put into the trust, as well as guardianship for your children under 18.
Who is involved in the trust?
There are a few parties involved in a living trust:
- The creator of the trust (you)
- The trustee(s) who you designate to manage your assets (and they agree). Many people simply name themselves as trustees to be able to handle assets during their lifetimes.
- The successor trustee, or the person who will take over as trustee when the trustor dies or becomes incapacitated. This is almost always a spouse.
- The beneficiaries of the trust
What has to be included in the trust?
In order to set up a living revocable trust, you must prepare a document with the following information:
- The date of the trust
- The names of all parties involved in the trust
- All property must be transferred to the trust to take advantage of the trust’s benefits. Your lawyer can draw up the deeds to transfer ownership of your home and any other property from you to your trust
Once you have everything drawn up, you must sign it in front of a notary public (so he/she can verify your identity).
If you own a large estate, experts recommend that you set up a living trust. The kinds of assets your estate contains as well as the plans you have for yourself and your family members also play a part in the decision to set up a living trust.
If you have questions on whether or not you should set up a trust and how you can begin the process, contact us.