It is important to understand the fact that you have many different options when you are planning your estate. Far too many people assume that a last will is the only logical choice for people that are not extremely wealthy. In reality, this is not the case at all. The estate planning device called a revocable living trust is very useful for a wide variety of people. In this blog post, we will look at the benefits that living trusts provide.
Some people get nervous when they think about the idea of a trust, because they assume that they would never be able to touch any assets that they convey into the trust. This is true with irrevocable trusts to some extent, but things are entirely different with a revocable living trust.
The anatomy of a living trust begins with the grantor, which is the person that is establishing the trust. There is a trustee that is charged with the responsibility of administering the trust, and beneficiaries are added that can receive monetary distributions from the trust. When you set up a revocable living trust, you can act as the trustee and the beneficiary while you are alive. In this manner, you maintain total control, and since the trust is revocable, you can dissolve it entirely if you ever choose to do so.
When you create the trust agreement, you name a successor trustee to handle the trust administration tasks after you are gone. You would also name your heirs as successor beneficiaries. After you take this step, you have the freedom to change the trustee or the beneficiaries at any time, so there is a great deal of flexibility.
It also extends to funding the trust. If you convey assets into a trust, you have the ability to reassume personal possession of them if you ever want to go that route. You also have the latitude to convey additional property into the trust at any time.
The legal process of probate enters the picture when a last will is utilized as an asset transfer vehicle. There would be an executor named in the document, and this individual would serve as the estate administrator. The will would be admitted to probate, and the estate administration process would be supervised by the probate court.
This may sound harmless on the surface, but there are actually some significant drawbacks to take into consideration. One of them is the time factor. You would probably like your heirs to receive their inheritances early after you pass away. Unfortunately, this will not happen if you use a will, because the probate process will typically take nine months at minimum. The executor is not allowed to distribute funds to the inheritors until the estate has been probated and closed by the court.
Another probate drawback is the loss of privacy. Anyone that wants to find out what happened can access probate records. This loss of privacy is not very appealing in a general sense, but the knowledge could cause hard feelings among family members and others.
The final drawback that we will look at here is the financial part of the equation. There are numerous different expenses that pile up during probate, including attorney fees, court costs, appraisal and liquidation charges, the executor’s payment, and other incidentals. All of these negatives are avoided if you use a revocable living trust instead of a last will.
When a will is utilized, the heirs receive lump sum inheritances. If you have someone on your inheritance list that is not very good at handling money, this can be a source of concern. With a living trust, you can instruct the trustee to distribute assets to the beneficiaries over an extended period of time so they cannot burn through their inheritances too quickly.
Attend a Free Seminar With Our Mount Clemens Estate Planning Lawyers!
These are a number of the benefits that come along with the creation of a revocable living trust, but there are others. If you would like to learn more about living trusts and other important estate planning matters, we are offering some great opportunities to build on your knowledge. Our Mount Clemens estate planning lawyers are conducting a number of free seminars in the near future, and we urge you to attend the session that fits into your schedule. The seminars are free to attend, but we do ask that you register in advance, and you can do just that if you visit our seminar schedule page.